Although risks to the global economy from the U.S.-China trade war remain elevated, the BoC has maintained a relatively hawkish tone compared to other major central banks on upbeat domestic growth data and a strong labor market.

Expectations of fiscal spending from Prime Minister Justin Trudeau's Liberal government, which won the election this week but lost its majority, has lowered market bets for a rate cut by the end of this year to around 10% from about 90% in September.

Over 70% - 27 of 38 economists - in the Oct. 22-24 Reuters poll predicted the BoC would diverge from major peers the Federal Reserve and the European Central Bank and keep its benchmark rate unchanged at 1.75% at both its Oct. 30 and Dec. 4 meetings.

That is a significant shift in expectations from a poll taken last month where only around 55% of economists predicted rates on hold by end-2019.

On whether the BoC would cut rates before end-March, economists were split, with 19 of 35 economists predicting at least one rate cut.

"Overall, we are expecting to see some softening in the near term, coming from the evident slowdown in global growth. Canada won't be immune to the deceleration in trade around the world," said Avery Shenfeld, chief economist at CIBC Capital Markets.

"We might need the help of one rate cut early next year to provide some assurance," he added.

The remaining 16 economists forecast no policy change before the end of the first quarter.

"The latest data on inflation, wages and the business outlook survey indicate the Canadian economy is operating pretty close to full capacity, which for the BoC, is a good starting point to absorb some of the global economic headwinds," said Josh Nye, senior economist at RBC.

"So we are less confident the BoC is actually going to lower rates."

A divide among respondents is now evident, with 11 of 21 economists saying the economy needed a rate cut by end-2020 but 10 of the view one was not required.

Despite inflation predicted to remain close to the central bank's target of around 2% until at least 2021, the consensus narrowly pointed to a rate cut in the first quarter of next year and policy on hold after that until the middle of 2021 at least.

In addition to risks from a slowing global economy, the ongoing U.S.-China trade war, the expected monetary policy divergence will push the Canadian dollar to strengthen and may hurt domestic growth.

The Canadian economy was forecast to lose momentum and slow to 1.4%-1.5% on an annualized basis each quarter next year - less than half the latest reported 3.7% rate when it surpassed the U.S. economy for the first time in nearly two years.

"Arguably permanent damage is already done to the global outlook with trickle over effects into Canada. If the Fed cuts on top of the BoC's policy rate and goes beneath, CAD will keep lighting up and impair export competitiveness. Fiscal stimulus may be too little, too late, and transitory," noted economists at Scotiabank.

The median probability of a recession in the next 12 months held at 25% and at 35% for the next two years, unchanged from the previous poll.

That is well below the 35% probability of a U.S. recession in the next 12 months - the highest percentage in the current economic expansion - and a high 45% for the next two years.

"Canada's economy turned in a strong rebound in the second quarter of 2019, but we see little staying power and a return to a more modest expansion," noted Brian DePratto, senior economist at TD.

"Data trends continue to blow hot and cold. Labor markets have begun translating into wage pressures, and housing activity is showing signs of life, yet consumer spending is tepid."

(Polling by Mumal Rathore and Indradip Ghosh; Editing by Rahul Karunakar and Lisa Shumaker)

By Mumal Rathore and Indradip Ghosh