Article content

OTTAWA — Canada’s economy grew modestly in the fourth quarter and well below the strong pace set in the first half of the year, boosted by housing gains ahead of tighter mortgage regulations but hurt by a smaller accumulation of inventories.

The report from Statistics Canada on Friday was expected to keep the Bank of Canada in a holding pattern on interest rates at its policy meeting next week, though the central bank is still on track to raise borrowing costs later this year.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Economy slows more quickly than expected, lowering bets of Bank of Canada rate hike next week Back to video

Canada’s gross domestic product grew by an annualized 1.7 per cent in the final quarter of 2017, short of economists’ forecasts for 2.0 per cent growth. The Canadian dollar touched a 10-week low against the greenback following the report before paring losses.

The economy grew 3 per cent for the year, its best performance since 2011, thanks to annualized growth of 4 per cent or better in the first two quarters. Analysts said the economy was likely returning to a more sustainable pace.