Most of Canada’s primary securities dealers expect an interest rate hike in the first half of the year, with May seen as the most likely month for the central bank to resume its tightening campaign.

A Reuters survey on Friday also showed that in the past month three of the dealers — the institutions that deal directly with the central bank as it carries out monetary policy — had pushed back their forecast for the next rate hike. One brought their forecast forward.

None of the 12 dealers expected the Bank of Canada to hike rates at the next policy-setting announcement on March 1.

Seven of the primary dealers see a hike in the first half of the year, unchanged from the Jan. 18 poll.

On the timing of the first hike, three dealers expect an April rate rise, four forecast a hike in May, and three predict a boost in July. Two dealers see rate hikes starting later in the year.

The survey was conducted after tame Canadian inflation figures for January showed that the Bank of Canada, which targets 2% inflation, faces little pressure to quickly resume the rate hike campaign it began last year.

© Thomson Reuters 2011