To counter “still too high” inflation, the Bank of Canada again raised its key rate by 50 percentage points on Wednesday morning, taking it from 3.75% to 4.25%.
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This is the seventh consecutive increase in the key rate.
According to the Bank of Canada, inflation remained “high and widespread across the globe”. She points out that the country’s gross domestic product growth “was stronger than expected in the third quarter, and the economy continued to show excess demand,” it said.
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The Bank estimates that growth should “essentially stagnate until the end of the year and during the first half of 2023”.
“Core inflation measures remain around 5%. Their three-month rates of change have declined, however, an early sign that price pressures may be easing. That said, inflation is still too high and short-term inflation expectations remain elevated,” the Bank explained.
The Governing Council of the Bank of Canada “will assess whether it is necessary to raise the policy rate further to bring supply and demand into balance”, it was specified.