Canada’s economic underperformance will continue as competitiveness challenges restrain exports and the slowdown in housing intensifies. We expect GDP to increase by 2.0% in 2014, before slowing to only 1.5% in 2015. Under these circumstances, the Bank of Canada will have to keep interest rates low for the foreseeable future. Although it is not our central view, the likelihood of an interest rate cut is greater than any rate increase.
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