For the 13th consecutive time, the Bank of Canada announced that it is leaving its main interest rate, the overnight rate, unchanged at one percent.

At the same time the governor of the Bank, Mark Carney, advised that he is laying the groundwork for higher interest rates, if the Canadian economy and the global economy continue to show signs of improvement.

In fact he increased the Bank’s economic growth forecast for calendar 2012 to 2.4 percent, signalling that the slack in the Canadian economy might be closed by early 2013 rather than in the latter part of that year.

The governor also noted that the United States recovery has become more resilient and financial conditions are more supportive of economic growth than in the past.

With this statement he is preparing the market for the inevitable date when monetary policy becomes less accommodative, meaning higher, short term interest rates.

This is the first time since September 2011 that the Bank of Canada has hinted about the possibility of interest rate increases.

On the other hand, The Federal Reserve continues to say that they will keep their rate near zero until 2014.

The Bank of Canada has scheduled its future interest rate announcement for 2012 as follows:

June 5th,

July 17th,

September 5th,

October 23rd,

December 4th.