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After economic growth of three per cent in 2017, and 1.8 per cent in 2018, the central bank is bracing for a period of subdued economic activity.

Years of outsized borrowing appears to have caught up with households, which have cut their spending significantly

The recalibration was made necessary by Statistics Canada’s latest tally of gross domestic product, which shows the economy nearly stalled in the fourth quarter.

Years of outsized borrowing appears to have caught up with households, which have cut their spending significantly.

The housing market no longer is red hot. Exports and business investment have gone cold, as weak oil prices and the trade wars sap business confidence.

Policy makers said the gap between actual economic output and its estimate of what the economy can produce without stoking inflation is wider, although they won’t have a new estimate until April.

Still, the central bank is less worried about losing their grip on prices, meaning it can leave borrowing costs low for longer.

“Governing Council judges that the outlook continues to warrant a policy interest rate that is below the neutral range,” which is 2.5 per cent to 3.5 per cent, the statement said.

“Given the mixed picture that the data present, it will take time to gauge the persistence of below-potential growth and the implications for the inflation outlook.”

Those words suggest the Bank of Canada’s slow march to higher interest rates in now on hold, perhaps until 2020. There was no hint in the central bank’s statement that policy makers contemplated cutting interest rates.