The Bank of Canada is keeping its key rate at its floor value of 0.25%, but should raise interest rates soon. She made the announcement on Wednesday morning as inflation continues to hit record highs in the country.
Last December, annual inflation hit 4.8% – its highest level in 30 years, since September 1991. In Canada, as elsewhere in the world, the effects of supply disruptions have caused a sharp upward pressure on prices.
However, “inflationary pressures associated with strong demand, shortages and high energy prices are expected to ease over the course of the year,” said the Bank of Canada, which forecasts inflation to decline “relatively quickly.” to around 3% by the end of 2022. Inflation is then expected to gradually decline in 2023 and 2024 to around 2%, according to the Bank of Canada.
While the Canadian economy was experiencing strong momentum heading into 2022, the arrival of the Omicron variant slowed down economic activity in the first quarter. But “the consequences on the economy should be less serious than in previous waves,” puts the Bank of Canada into perspective in its report.
Bank of Canada Governor Tiff Macklem will hold a press conference at 11 a.m.
Further details will follow.
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