Economists scouring today’s semi-annual Monetary Policy Report from the Bank of Canada found no surprises, and plenty of reason to believe that another 50 basis point cut to interest rates is coming at the end of the month.

BMO Nesbitt Burns says that the report effectively repeats much of the message delivered after the big 75 bps rate cut on October 23.

“The bank has put a slightly finer point on its economic forecasts, but openly admits that this is just a “working assumption” that assumes no further escalation in terrorist activity and a return of business and consumer confidence to normal levels by late next year. Under this scenario, the Bank sees GDP growth reviving from zero-to-negative in the second half of this year, to 2% by first-half 2002, and to 4% in the second half of 2002.”

“What did stand out in today’s report, however, is the extent to which uncertainty is left, right, and centre in the bank’s outlook — to the point where it was deemed necessary to refer to its ‘working assumptions’ rather than a ‘conventional forecast’. With inflation nowhere to be seen, and the near-term risks to the economy squarely biased to the downside — as readily acknowledged in today’s Report – the door remains wide open for another serving of interest rate relief, starting with a 50 basis-point installment on November 27,” says TD Bank.