Interest rate cuts are coming, but the Bank of Canada won't say when

Weary Canadian households, clobbered by nearly two years of rising prices and skyrocketing interest rates, will have to wait a little longer for relief on their borrowing costs.

The Bank of Canada left its key overnight lending rate unchanged at five per cent on Wednesday, citing the persistence in underlying inflation and concerns that it might declare victory too soon and be forced to backtrack.

But the bank says it has shifted from whether rates are high enough to how long rates need to remain elevated.

«If the economy evolves broadly in line with the projection we published today, I expect future discussions will be about how long we maintain the policy rate at five per cent,» central bank governor Tiff Macklem said at a news conference in Ottawa.

The obvious question, then, is when rates might begin to fall. On that, the Bank of Canada won't say.

«It is important that we don't give Canadians a false sense of precision,» Macklem told reporters.

Rates could start falling by summer: economists

If you read through the bank's projection, you can probably put the pieces together yourself. The bank expects inflation to decelerate to 2.5 per cent by the end of the year. It believes the economic growth will remain near zero per cent but won't dip into a recession.

So most economists expect the central bank will start lowering interest rates by the summer.

«We see no reason to alter our call for the first [quarter-point] cut to come in June, and for the bank to surpass market expectations by delivering a total of 150 basis points in cuts by the end of this year,» Avery Shenfeld, chief economist at CIBC Capital Markets, wrote in a note to clients.

«BMO's call for a June start to rate cuts looks perfectly reasonable at the moment,» wrote