House prices are rising; the number of homeowners with underwater mortgages and the number of mortgage delinquencies are down. I expect these improvements will help to support consumer spending going forward. Business balance sheets are also healthy. Industrial production was very encouraging in November, when it advanced 1.1 percent on gains in all major categories.
•  Despite the reduction in global tail risks as a result of a series of actions by European and American authorities, the inflation outlook in Canada is still subject to significant risks.