“The road to a soft landing is getting narrower and narrower,” said the Governor of the Bank of Canada when asked regarding the risks of persistent inflation.
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“Inflation is widespread, even the price of services is rising by around 5% and this reflects an economy which is overheating”, says Tiff Macklem.
The solution is to continue to increase key rates according to the Governor of the Bank of Canada, but the results will only be seen in several months.
“Monetary policy takes a while to influence inflation. Monetary policy is working well, but it takes time and yes inflation is much too high and this affects Canadians, but it will remain high for several more months,” he explains.
The end of inflation will not come before 2023.
“Next year with a better balance between demand and supply we will see that inflation will go down,” said Mr. Macklem.
