The Bank of Canada (BOC) is Canada’s central bank, and was established in 1934 under the Bank of Canada Act. The Bank of Canada (BOC) has stated that, in the third quarter of next year, rates will be raised due to rising inflationary pressures globally. And after taking into account several other factors, forecasts on this issue may be faster than previously expected.
Among the key factors that can be emphasized is the issue of global supply chain resistance. Moreover, according to economists surveyed by Reuters, the lack of labour and rising in energy costs could also be risk factors for the hike earlier.
Despite rising inflation rates globally, Canada still appears to be in good shape with the job market strengthening faster than other countries. That view is reinforced as demand picks up as the Covid-19 pandemic recovers. But, lack of supply resulted in limited sales and rising costs.
Canada’s inflation rate soared to an 18 -year high of 4.4% last month, driven by high gas prices, rising housing prices and rising food prices, putting pressure on the BoC to consider a rate of increase in commodity prices for so long.
In conclusion, based on the discussion among the economist, the interest rate of Canada may be increased 3 months earlier than expected.