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You can see other videos from our team by tapping here. If you refresh your browser, or Bank of Canada raises interest rates, read the official statement by The Bank of CanadaBank of Canada on Tuesday, which increased the overnight rate to 4.25 per cent, with the bank rate at 4.5 per cent and the deposit rate at 4.25 per cent. The bank is continuing its policy of quantitative tightening.
Inflation around the world is high and broadly based. The labour market is still overheated and the economy is weak but consumption continues to be solid and global economic growth is slowing down, although it is proving more resilient than expected at the time of the October Monetary Policy Report MPR in the United States. There is a gradual easing of global supply bottlenecks, although further progress could be disrupted by geopolitical events.
In Canada, GDP growth was stronger than expected, and the economy continued to operate in excess demand. Canada's labour market is tight, with unemployment near historic lows. While commodity exports have been strong, there is growing evidence that tighter monetary policy is restraining domestic demand: consumption has moderated in the third quarter, and housing market activity continues to decline. The data since the October MPR supports the Bank's outlook that growth will stall through the end of the year and the first half of next year.
The CPI inflation remained at 6.9 per cent in October, with Canadians buying many goods and services that show large price increases. Core inflation measures remain around five per cent. Three-month rates of change in core inflation have come down, an early indication that price pressures may be losing momentum. Inflation is still too high and short-term inflation expectations remain elevated. The longer consumers and businesses expect inflation to be above the target, the greater the risk that elevated inflation becomes established.
Kevin Carmichael: Economy grows faster than expected, raising the odds of another big rate hike. Governing Council will consider whether the policy interest rate should increase to bring supply and demand back into balance and return inflation to target. The Governing Council continues to assess how tighter monetary policy is working to slow demand, how supply challenges are resolving, and how inflation and inflation expectations are responding. The policy rate is bolstered by quantitative tightening. We are steadfast in our commitment to achieving the two per cent inflation target and restoring price stability for Canadians.