Canada's central bank holds rate at 1%

OTTAWA, July 19 (UPI) -- The Bank of Canada left its central rate at 1 percent Tuesday and expressed concerns over economies in Europe and the United States.

"The U.S. economy has grown at a slower pace than expected and continues to be restrained by the consolidation of household balance sheets and slow growth in employment," the bank said in a statement from Ottawa. "While growth in core Europe has been stronger than expected, necessary fiscal austerity measures in a number of countries will restrain growth over the projection horizon."

As for Canada itself, the bank said consumer spending "remains solid and business investment robust," although exports in recent months had been lower, largely because of the U.S. economy.

"Despite increased global risk aversion, financial conditions in Canada remain very stimulative and private credit growth is strong," the report said.

The bank forecast the Consumer Price Index, now running above 3 percent, would return to its 2 percent target by the middle of 2012.