The CIBC says Canadians may enjoy historically low interest rates into 2014.
The bank released its new outlook for the global and Canadian economies, and all indicators point to weakening conditions and rising risks.
It says Canada’s economy will barely keep its head above water with growth rates of 2.1 per cent this year and next year, after growing 2.4 in 2011 and over three per cent in 2010.
The main reason, the bank says, is that the global economy will continue to slow, down to three per cent this year, the slowest pace of expansion since the recession.
As well, Canadian consumers are tapped out and governments are spending less.
With this backdrop the Bank of Canada will find it difficult to raise interest rates, says the CIBC, predicting it may wait until U.S. growth picks up sometime in 2014.