Canadians are worried that inflation will last long: Bank of Canada survey

Bank of Canadashows rising expectations forinflationby Canadian businesses and consumers.

Central banks expect higher inflation in the short term in a corporate outlook survey released Monday, with firms expecting inflation to be longer than in the previous survey He said he was doing it.

"Many companies continue to report plans to raise wages to attract and retain workers," banks said in a report, with companies wages and prices at a faster pace. He suggested that he expected to grow.

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"More and more companies are referring to rising living costs as an important source of wage growth. Almost half of the companies , We expect wage growth to remain above pre-pandemic levels over the next 12 months. ”

report also said companies expect sales growth to slow and return to normal following a rapid recovery from the pandemic. According to the

report, labor shortages and supply chain bottlenecks continue to be important issues, as supply chain problems take longer than previously expected to resolve.

In contrast, according to company outlook surveys, companies are restructuring their supply chains, holding more inventories than usual, and the majority of companies invest more and hire more. I am planning.

However, the Bank of Canada said long-term expectations of inflation by companies are stable between 2-3 percent.

Meanwhile, a survey of consumer expectations in Canada shows that consumer inflation expectations are also rising due to concerns about food, gas and rent prices.

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Consumer reports also impact expectations of rising inflation and rising interest rates on consumer confidence. Said that.

Banks, low-income Canadians and seniors grocery more than young respondents and high-income households He pointed out that he is interested in the price and rent of Canada.

Consumers, especially low-income earners, are adapting to high inflation by cutting spending, deferring large purchases, and looking for cheaper alternative discounts and options. Stated.

"Some consumers mention sticking to tight grocery budgets by buying more common products or not buying items that seem less needed. Some people rely on gardening for food or use cheaper commuting methods such as bicycles, "the report said.

However, the report also believes that most respondents believe that banks in Canada have the credibility and tools to bring inflation back to control, and that they have the ability of banks to reach their inflation target. I also found that my belief hasn't changed much from before. Pandemic.

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Last reported by Statistics Canada in May, when the annual inflation pace rose to 7.7%, the highest level since 1983.

The Bank of Canada is raising key interest rate targets to bring inflation back to its target. 2 percent.

The central bank has raised interest rates three times so far this year in order to raise the key policy rate to 1.5%. The next interest rate decision is set for July 13, and many private sector economists expect the Bank of Canada to raise its key interest rate by three-quarters percentage points.

Royal Bank Assistant Chief Economist Nathan Janzen wrote in a note on Monday morning that the two releases from the central bank "It just goes up further," he said. The odds of moving 75 basis points next week. "

— File from Craig Lord of Global News

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