Most Bay Street analysts expect at least one more 25-basis-point rate hike on Jan. 25, given the stronger than-expected inflation report for November and a blockbuster December jobs report. That would bring the Bank of Canada’s policy rate to 4.5 per cent.
The Business Outlook Survey Indicator, which pulls together various survey responses into a single data point, dropped to near zero, the lowest level since the third quarter of 2020. More businesses than usual said they expect their sales to slow in the coming year, while many dialed back plans to hire new workers and invest in new machinery and equipment.
Inflation expectations are a key variable for the Bank of Canada. What workers and businesses believe about future inflation can impact wage-negotiations and price-setting behaviour. The central bank remains concerned that the longer inflation stays high, the more likely that it will become baked into people’s psychology, making the bank’s inflation-control job more difficult.
Belgique Dernières Nouvelles, Belgique Actualités
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