Bank of Canada expected to hold benchmark interest rate as economic clouds gather

The Bank of Canada is widely expected to leave its benchmark interest rate unchanged at 1.75 per cent this morning after a 25-basis-point increase at its last setting in October.

The announcement follows Sunday's announcement by the Alberta government to curtail oil production in the province starting in January to try to clear a crude storage glut that has driven western Canadian oil prices to multi-year lows.

General Motors Canada's recently announced plan to stop allocating product to its Oshawa assembly plant by late next year also offers a downside risk to future growth.

Bank economists say an unexpected dip in G-D-P figures in September and lower-than-expected oil prices so far in the fourth quarter have dampened growth expectations and placed in doubt forecasts for a January bank rate increase.

Economists will be closely watching Poloz's speech tomorrow in Toronto for signs of how events are affecting his view of the path forward