Analysts at UBS Securities Canada Inc. have cut their forecasts for Canadian gross domestic product growth for this year and next.

In a research note released Friday, UBS trimmed its 2010 GDP forecast for Canada to 3.1% from 3.5%, and lowered its 2011 forecast to 2.8% from 3.2%.

The report notes that “several of the temporary factors that boosted growth have run their course”, and a variety of other factors — historical revisions, a slightly weaker than expected second quarter, and a reduction in its U.S. outlook — all contributed to the move.

With the slower growth outlook, UBS has also revised its projected pace for interest rate increases by the Bank of Canada. It now expects the target rate to reach 2% by the end of 2011, down from its previous call of 2.5%.

“Government and corporate yield curves, although gradually flattening, still appear consistent with a respectable recovery,” it adds.