CANADA'S CENTRAL BANK MAY NEED TO BE ''FORCEFUL'' AS INFLATION TOPS 5%

Feb 16, 2022

By Bob Komsic

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With inflation at a 31-year high and the Bank of Canada expected to start raising its key interest rate next month, the deputy governor says the central bank may have no choice but to be ”forceful.”
The pace of interest rate increases and just how high it eventually climbs will depend on what happens with inflation.
It hit 5.1% in January and is expected to remain close to 5% until the middle of 2022.
Deputy governor Tim Lane says policy-makers believe it will fall quickly in the second half of the year, but adds they’re ”alert to the risk” a rapid rise in prices could last longer.
”We will be nimble–and if necessary, forceful–in using our monetary policy tools to address whatever situation arises,” Lane adds.
Prices for groceries rose by 6.5% year-over-year for the largest yearly increase since May 2009.
Excluding gasoline prices, Statistics Canada says the annual rate of inflation would have been 4.3% last month.
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