In Canada, the economy grew at an annual rate of 3.9% in the first quarter, reflecting continued strong business investment, smaller contributions from household and government spending, and a modest drag from net exports.
The U.S. economy continues to grow at a modest pace, limited by the consolidation of household balance sheets. Growth in Europe is maintaining momentum while the disasters that struck Japan in March are severely affecting its economic activity and causing temporary supply chain disruptions in advanced economies. Commodity prices have declined recently but are expected to remain at elevated levels, supported by tight global supply and very strong demand from emerging markets. These high prices, combined with persistent excess demand conditions in major emerging-market economies, are contributing to broader global inflationary pressures.
Economists predicted the prime rate to reach 3.75% by end of 2011, and 4.25% by 2012. The rate hike is likely to commence September, October and December of 2011.
Filed under: General Mortgage News
