The Bank of Canada says inflation should ease next year.
Currently, our inflation rate is 4.5 percent, but Bank of Canada governor Tiff Macklem says some of the bottlenecks and supply chain issues caused by COVID-19 should decrease next year to about two percent.
“We do expect that those will ease,” explains Macklem.
“Vaccinations are working. People around the world are getting vaccinated. That should reduce the spread of the virus. That should reduce these production problems. That should reduce the labor shortages or shutdowns at ports.”
Macklem says as inflation eases then expect the Bank of Canada interest rate to go up as well.
“We will be considering raising interest rates sooner than we previously thought. So interest rates don’t have to be as low for as long to get that full recovery and get inflation back.”
The central bank is leaving the key interest rate at 0.25 percent.
