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Bank of Canada’s latest indicator clinches it — interest rates are going up soon

By Kevin Carmichael for Financial Post

Kevin Carmichael: If not next week, then perhaps in May. But don’t panic the economy will be OK

Donald Trump may have changed the rules of politics, but luckily for Canadians, the laws of trade gravity are harder to bend.

A new survey of executives by the Bank of Canada — and the last significant economic indicator before policymakers’ interest-rate decision next week — suggests most companies are tuning out the U.S. president’s harangues about “horrible” commercial agreements and his threats to correct the alleged unfairness with tariffs.

Or at least they were between early February and early March when the latest Business Outlook Survey (BOS) was conducted. That was before the U.S. and China squared off for a trade war, so maybe animal spirits have waned a little.

But heading into the spring, Canadian firms were transfixed by the prospect of the gross domestic product of their biggest market expanding three percent this year, not Trump’s Twitter account. Seventy-one percent of respondents told the central bank they had so far been unaffected by U.S. policy announcements or uncertainty about what the Trump administration might have in store; about nine percent said they had been helped by policy changes, presumably last year’s tax cuts, various regulatory changes or both.

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