Good news and bad news for homeowners; low interest rates are set to be around for a while but the Canadian economy is likely to remain sluggish.

Speaking at a conference in the UK, the Bank of Canada’s senior deputy governor Carolyn Wilkins said that weakness in the global economy poses a risk to Canadian growth with low interest rates and slow growth damaging corporate investments and impacting the labour market.

Additionally, she said that “households could experience longer and more frequent periods of shrinking incomes, making their debts more burdensome.”

The low cost of borrowing may also encourage greater credit risks with potential damage to the financial system.

Ms. Wilkins urged lenders and the wider population to “adapt to the new reality of lower potential growth.”