Bank of Canada sees "subdued" household spending

* Says can handle a housing bubble within current mandate

* Has flexibility in terms of inflation target

OTTAWA, Oct 20 (BestGrowthStock) – If an asset price bubble arises
in Canada’s housing market, there would be room to deal with it
within the Bank of Canada’s current inflation-targeting
mandate, the head of the central bank said on Wednesday.

Mark Carney has expressed concerns on several occasions in
recent months about rising household debt levels, which have
been fueled in part by low borrowing rates.

He said on Wednesday, however, that the bank expects a more
“subdued profile for household spending” going forward,
following a recent stretch of robust growth.

The slowing global economic recovery — especially in the
United States — led the Bank of Canada to hold interest rates
at 1 percent on Tuesday after raising them in its prior three
consecutive meetings. [ID:nN19118876]

The higher rates helped temper the strength in Canada’s
housing market, which some market observers said was beginning
to get ahead of itself.

Carney said that while the bank’s clear mandate is to
target inflation, it has the ability to deal with any bubbles
that might arise.

“There is some flexibility in terms of achieving the
inflation target horizon, I would say under the current
mandate, that would take into account asset price bubbles if
appropriate,” he told reporters in Ottawa.

“But we have set policy appropriately. I have referenced
what our expectations are for household debt, and we’re
comfortable with where we are.”
(Reporting by John McCrank; editing by Rob Wilson)

Bank of Canada sees "subdued" household spending