2 Attachment(s) The Bank of Canada is maintaining its key interest rate unchanged at 0.5% as it weighs the clashing forces of falling inflation and an astonishing burst of economic progress.

But the central bank warned Wednesday that both aspects might be momentary.

The torrid growth in the first-quarter – now on a pace going to 4.7% yearly rate – will be adopted by “some moderation” in the April-to-June quarter, the bank said in a declaration. In April, the bank had forecast 3.8 percent GDP growth in the first quarter. Likewise, a number of the current inflation weakness might not last. The bank stated that inflation has been pushed lower by “intense retail competitors,” which has led to falling food prices.

All three of the bank's core inflation actions stay below the bank's two percent goal – reflecting “ongoing excessive capacity in the economy,” according to the assertion.