Bank of Canada rightly remains neutral on rates

The Bank of Canada's neutral policy statement on the rate outlook showed that it isn't concerned about the recent uptick in inflation, since this is due to temporary factors rather than any improvements in domestic economic fundamentals. Although it acknowledged the recent strength in second-quarter exports, it is unconvinced by this due to continued weakness in business investment and hiring. Meanwhile, other indicators point to subdued inflation, justifying the Bank's neutral stance.