Bank of Canada Warns of Rising Inflation Expectation
The Bank of Canada governor, Tiff Macklem, indicated that the bank expects a significant increase in inflation expectations due to rising oil and petroleum product prices, with risks of inflation widening and becoming more widespread due to conflicts in the Middle East, shipment delays, and the impact of damages on the refining sector. The expectations will be reviewed in the upcoming interest rate decision scheduled for October 28, as the market remains cautious about a possible 100 basis point increase in interest rates over the next year, although no changes are expected in the upcoming decision. The bank is focused on the extent to which rising oil prices are linked to inflation and the ability to return to the 2% target, amid continued global economic resilience despite financial challenges and geopolitical tensions.
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