(Victoria) Recent economic data suggests the risk of lingering inflation has increased, prompting the central bank to decide on Wednesday to raise interest rates, a Bank of Canada deputy governor said Thursday.
In the text of a speech to the Greater Victoria Chamber of Commerce on Thursday, Paul Beaudry revisited the central bank’s decision to end its pause on interest rate hikes, which had been announced in January .
The bank’s key rate is now at 4.75%, its highest level since 2001.
According to Beaudry, the combination of stronger growth, a tight labor market and rising inflation in April suggests that the overheated economy has persisted longer than the central bank had expected. .
The deputy governor pointed out that the rapid rise in consumer spending has taken the central bank by surprise, while buyers seem to be returning to the housing market.
Overall, Beaudry said the central bank has acted to ensure inflation, which in April stood at 4.4% on an annual basis, does not remain stuck above its target. 2.0%.