Economy pulls back amid higher interest rates

OTTAWA — The Canadian economy appeared to stall in the second quarter as investment in housing continued to fall, led by drop in new construction.

Statistics Canada says the economy contracted at an annualized rate of 0.2 per cent in the second quarter.

The agency also revised its reading for growth in the first quarter to an annual pace of 2.6 per cent, down from 3.1 per cent.

The pullback in the second quarter came as housing investment fell 2.1 per cent to post its fifth consecutive quarterly decrease.

New construction dropped 8.2 per cent in the quarter, while renovation spending also fell 4.3 per cent.

The report comes ahead of the Bank of Canada’s interest rate decision set for next week.