Tackling inflation timidly would be a “serious mistake,” says Bank of Canada Governor Tiff Macklem

2023-11-23 03:01:23

Bank of Canada Governor Tiff Macklem has warned that it would be a big mistake to fight inflation half-heartedly and suffer the consequences.

The governor was delivering a speech to the Saint John Regional Chamber of Commerce in New Brunswick on Wednesday, the day after the release of new inflation figures showing it has slowed to 3.1%. in October in Canada.

In his speech, Mr. Macklem compared the fight against inflation today to that of the 1970s, highlighting the similarities and differences between the two periods. Inflation in the 1970s was also triggered by global events, he said, but it became volatile and long-lasting in part because the government and central bank were unwilling to restrain spending and raise rates sufficiently. of interest to curb it.

Canada today has two advantages over the 1970s for the governor: people expect inflation to fall in the long term and the Bank of Canada has responded vigorously this time with hikes. energetic rates.

Mr. Macklem’s speech also comes a day after Finance Minister Chrystia Freeland presented the federal government’s fall economic statement, which includes new limits on public spending as the economy slows and inflation remains high.