Rate is unlikely to go much lower
There was no room left for misinterpretation when Bank of Canada (BoC) governor Tiff Macklem said the inflation rate would likely remain “painfully high” for the rest of 2022.
On Wednesday, Statistics Canada revealed the annual inflation rate had soared to a staggering 8.1% in June, marking the most significant leap since January 1983. It climbed from a near-record 7.7% in May.
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Macklem (pictured) said in an interview with CTV News that the inflation rate would likely start with a seven until December.
The driver behind the bloated rate is mainly increased gas prices, which have since tapered off this month. Macklem said the July inflation data is likely to reflect this change.
The BoC expects inflation to drop to around 3% by the end of 2023 and meet the central bank’s target of 2% by the end of 2024. However, economists have said the impact of rate hikes could take more than six months to manifest.
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The next rate decision is slated for September 07 — almost a month following Statistics Canada’s report on July inflation. However, Macklem said another rate hike is expected on top of the full percentage point increase last week as part of the “deliberate front-loading” response on the central bank’s end.
“We want to get ahead of this,” Macklem told CTV News.
