2023-11-22 20:28:09
The excess demand that has been pushing prices up since the start of inflation has finally calmed down, according to the head of the Bank of Canada, Tiff Macklem.
This is what he explained Wednesday during a speech to the Chamber of Commerce of the Saint John region, in New Brunswick, the day following the announcement of a slowdown in inflation in the month of october.
“We expect the economy to remain weak over the coming quarters, meaning further downward pressure on inflation is in the works,” he explained.
“In short, the excess demand in the economy that made it too easy for prices to rise is now gone,” Macklem added.
Inflation stood at 3.1% last October, much lower than the peak of 8.1% reached in June 2022.
The Bank of Canada then quickly increased its key rate which reached 5% in an attempt to calm the economy, which should continue to bring down inflation.
Mr. Macklem acknowledged, however, that higher interest rates can weigh on Canadians. According to him, these rates might now “be restrictive enough” to control inflation.
The Bank of Canada is expected to rule on its key rate on December 6 and decide whether it will maintain its pause or decide to lower or raise it.
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