Canadian businesses may be more optimistic about the economy, but don’t expect that to translate into higher interest rates just yet, economists caution.

The Bank of Canada’s Business Outlook Survey released Monday signals an optimistic turn is business sentiment, with the outlook for sales on the upswing. This is echoed by the BoC’s latest Senior Loan Officer Survey, which hints at easing credit conditions, too.

However, economists caution that the persistence of external risks will likely keep the bank from raising rates soon. TD Economics notes that, while “business sentiment has rebounded sharply from the darkest days of last year, the external risks haven’t evaporated, and now there is the drag from elevated energy prices to add in to the equation.”

“We will wait until next week’s interest rate announcement and Monetary Policy Report to see how this surge in optimism filters through into the Bank of Canada’s forecasts. The bank has already acknowledged that the outlook had marginally improved since its last MPR, but views the stronger-than-expected growth as owing to ‘temporary factors’ – hardly a ringing endorsement for an immediate need for higher rates,” TD says in a research note.

TD maintains that it expects the BoC to wait until next year before raising interest rates. This caution is reflected among other economists, too. RBC Economics also sees rates remaining at 1.00% through the end of 2012, and says they are only likely rise to 2.00% by the end of 2013.

RBC also stresses that the external headwinds “have not totally dissipated”, pointing to the European sovereign debt issue in particular. “Thus the Bank of Canada is expected in the near term to keep conditions highly accommodative to better weather this potential downside risk,” it says.

“The better business outlook and [Bank of Canada governor Mark] Carney’s recent more hawkish remarks suggest the risks of the Bank moving on rates this year are rising—although concerns on the U.S. and Europe argue for no urgency,” adds BMO Capital Markets. “Firmer business sentiment has to translate into firmer growth for the bank to act.”