Canada: Highest inflation in 18 years unlikely to change BoC’s rate path – NFB
17.11.2021, 16:38

Canada: Highest inflation in 18 years unlikely to change BoC’s rate path – NFB

Data released on Wednesday showed inflation in Canada reached the highest level in 18 years. Analysts at the National Bank of Canada still believed the Bank of Canada will hike interest rate probably in April of next year. 

Key Quotes:

“The Canadian CPI print for October was in line with the relatively high consensus expectations. As a result, annual inflation reached 4.7%, its highest level in 18 years. Gasoline prices jumped to a record high, registering another sharp increase of 5% during the month. Shelter prices were also propelled by the surge in energy prices. Consistent with the rise in food commodity prices earlier this year, food prices continued to post strong advances in October.”

“The average of the central bank's three preferred measures of annual inflation remained unchanged at 2.7%, above the mid-point of the central bank’s target range of 1 to 3 percent. These annual figures understate the recent trend for core inflation.”

“The central bank already expected high headline inflation for Q4, so this morning's print does not change our view that they will not raise the policy rate sooner as believed by the market. The Bank of Canada telegraphed a first hike in Q2 or Q3 in its last communication, and we continue to believe that April is the most likely scenario.”

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