By Julie Gordon

OTTAWA (Reuters). Canada’s economy expanded in November for the sixth straight month, matching expectations from October. Official data was released on Thursday. It indicates that the Bank of Canada will continue to hike interest rates despite Omicron variation.

Statistics Canada reported that October real gross domestic products rose 0.8% from September. This was in keeping with analysts’ estimates. November GDP, however, is most likely to have increased 0.3%. Statistics Canada also raised September’s GDP increase to 0.2%.

Statscan reported that Canada’s economy was 0.1% lower than pre-pandemic levels with November’s increase, although this is only a preliminary estimate. Analysts said that the gains suggest that fourth quarter GDP will rise faster than predicted by Bank of Canada.

Stephen Brown, senior Canada economist at Capital Economics stated in a note that this “means that the Bank may not too concerned about the renewed disruption caused by the deteriorating coronavirus condition.”

Many provinces placed new restrictions on businesses and closed them temporarily amid rising COVID-19 cases.

Brown stated that the effects of these measures will be temporary and would not affect Bank of Canada’s tightening plans.

According to the bank, this month’s economic slowdown was significantly reduced. This is the time for the bank to start raising rates from its historic lows.

Although the March 2022 rise in interest rates is expected to be the largest, money market traders are betting on a more recent move. [BOCWATCH]

Oct. GDP gains were broad-based. They included a rebound of manufacturing activity after being hit hard by supply chain bottlenecks.

This November gain was driven primarily by service industry growth. In the November release, there was no mention of the effects of floods in British Columbia which hampered road and rail access at Canada’s largest port.

Andrew Grantham (senior economist, CIBC Capital Markets) stated in a note that “The advance estimate November… although a bit disappointing relative to the industry data received in this past week, it is still a solid outcome given the flooding in B.C..”

Canadian Dollar traded nearly unchanged at 1.2827 US cents to greenback. That’s 77.96 U.S. Cents.