Impact of Unexpected Rise in Canadian Inflation
Last Updated: 18.5.2023 18:45
The Bank of Canada (BoC), after holding steady at its last two policy meetings, may have to reconsider its stance, especially given the steady underlying price pressures. The central bank, which has already implemented eight consecutive rate hikes, is on alert, ready to increase interest rates further if inflation remains significantly above its 2% target.
According to financial markets, the likelihood of a rate increase at the next BOC policy meeting on June 7 has almost doubled. This comes amid growing concerns about a potential rise in core inflation, with primary contributors being higher rent and mortgage interest costs.
???????? Canadian CPI Recap:
Headline CPI (YoY)
Actual: 4.4% ????
Expected: 4.1%
Previous: 4.3%Headline CPI (MoM)
Actual: 0.7% ????
Expected: 0.4%
Previous: 0.5%Core CPI (MoM)
Actual: 0.5%
Previous: 0.6%Core CPI (YoY)
Actual: 4.1% ????
Expected: 4.4%
Previous: 4.3%Common CPI (YoY):… pic.twitter.com/kqUVE7mOui
— PiQ (@PriapusIQ) May 16, 2023
Despite the overall inflationary trend, grocery prices grew slower in April than in March. However, gasoline prices saw a significant month-over-month increase, largely due to OPEC+’s decision to cut oil production.
In light of these developments, investors should brace for potential shifts in the financial landscape, with the Canadian dollar already showing a slight upward trend. As Canada grapples with these inflationary pressures, staying informed and preparing for the possible economic implications is essential.
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