TORONTO, January 16, 2002 -- While rising unemployment has prompted Canada’s central bank to lower its key interest rate for the 10th consecutive time, Bank of Montreal Executive Vice-President and Chief Economist Tim O’Neill predicts the current slump will be short and shallow.
O’Neill will present his views on the potential for economic recovery in North America on Tuesday, Jan. 22 at York University, hosted by the York Business & Professional Alliance. Despite recent figures showing a jump in Canada’s jobless rate to eight per cent, O’Neill says a recovery may be already underway due to prudent monetary policies in Canada and the United States.
The Bank of Canada cut its key overnight rate one-quarter of a percentage point this week to two per cent, the lowest level since September 1960. The bank said in a statement that while consumer confidence had improved, business confidence both in Canada and abroad remained weak, and excess supply could put downward pressure on prices this year.
The U.S. Federal Reserve cut interest rates 11 times last year to revive an economy which fell into recession in March, pushing its benchmark rate to the lowest level since November 1965. Analysts are predicting rate reductions will set the stage for economic recovery in the first half of this year, as long as consumer spending remains steady. The U.S. unemployment rate rose to 5.8 per cent in December, a six-year high.
O’Neill will speak at a breakfast meeting from 8 a.m. to 9:30 a.m. in the Assembly Hall, room 152, Founders College, York University, Keele Campus, 4700 Keele St. Tickets are $25 per person.
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