02:43 PM EDT, 04/09/2024 (MT Newswires) -- Former Bank of Canada and Bank of England governor Mark Carney warned that central banks may cut interest rates more slowly and by less than many expect as monetary policy adjusts to a new era defined by structurally higher inflation, The Globe and Mail newspaper is reporting Tuesday.

Speaking at an event in Ottawa on Monday evening, Carney said central banks are likely to start lowering interest rates this year as inflation continues to decline. "But expect those cuts to be slower and shallower," he said. "And what's more relevant, for most companies and individuals and households, is that in the medium-term, rates are going to be higher [than before], and are going to be higher because of structural things, and you better be prepared for that."

The report noted this echoes remarks made by current Bank of Canada Governor Tiff Macklem after the last rate decision in March. When asked about the likely trajectory of rate cuts, Macklem said that "it's very safe to say we're not going to be lowering rates at the pace we raised them."

The Bank of Canada's next rate decision is on Wednesday. The report noted most analysts expect the central bank to keep its benchmark rate steady at 5% for the sixth consecutive time, although they're watching for a shift in tone that could set the stage for rate cuts over the summer.

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