The Bank of Canada had expected productivity to improve as the economy recovered from the COVID-19 pandemic. Instead, it has fallen in eleven of the last 12 quarters, taking it back to its 2016 level
Canada’s record of declining productivity over the past three years is likely to make it more difficult for the Bank of Canada to tame inflation, raising the prospect of additional interest rate hikes even as the economy slows.had expected productivity, or output per hour worked, to improve as the economy recovered from the COVID-19 pandemic. Instead, it has fallen in eleven of the last 12 quarters, taking it back to its 2016 level.
“Our own forecast is that productivity growth will turn around, but that is a risk to the outlook and if productivity growth continues declining it will make it more difficult to get inflation back to target,” Macklem said.will return to its 2 per cent target in the middle of 2025. But data on Tuesday showed it rising more than expected to 4 per cent in August, led by higher gasoline prices, while wage growth accelerated last month to an annual rate of 5.2 per cent.
Money markets have moved to price in another rate increase by the BoC over the coming months. A switch to easing is expected by the end of 2024 but at a slower pace than at the Federal Reserve.
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
As inflation rises, experts split on whether Bank of Canada will hike rates againCanada’s headline inflation rate has gone up for the second straight month, and some experts are warning that the trend could mean another Bank of Canada interest rate hike is in store for October.
Read more »
Bank of Canada struck intentionally hawkish tone after last rate decisionThe Bank of Canada wanted to send the message that interest rates would not be coming down soon when it left them at a 22-year high after a policy meeting earlier this month, minutes published on Wednesday showed. The Bank of Canada (BoC) kept its key rate at 5% on Sept 6, noting the economy had entered a period of weaker growth, but said it could hike again should price pressures persist. A day later Governor Tiff Macklem said interest rates may not be high enough to bring inflation back down to its 2% target even after 10 hikes of a total of 475 basis points since March of last year.
Read more »
Bank of Canada mulled rate hike in face of stubborn inflationBank of Canada releases deliberations behind pause in interest rate hikes in September as new data shows rising inflation. Read more
Read more »
Bank of Canada struck intentionally hawkish tone after last rate decisionMarket News
Read more »
Bank of Canada mulled rate hike in face of stubborn inflationBank of Canada releases deliberations behind pause in interest rate hikes in September as new data shows rising inflation. Read more
Read more »
Bank of Canada: Underlying inflation is inconsistent with 2% targetThe Bank of Canada on Tuesday said recent volatility in headline inflation is not unusual but the underlying trend shown by core measures was inconsistent with bringing inflation down to the 2% target. Earlier on Tuesday, August inflation figures showed a jump in the headline number to 4.0% from 3.3% in July, higher than most analysts had forecast. 'Ups and downs of the size we've seen in the past couple of months are not that unusual,' Deputy Governor Sharon Kozicki said in a speech at the University of Regina in Saskatchewan.
Read more »