Bank of Canada may need to raise rates again, despite this week's hold: Macklem
CTV
Bank of Canada Governor Tiff Macklem said the central bank may have to raise interest rates further, given inflation may stay high for some time.
Bank of Canada Governor Tiff Macklem said the central bank may have to raise interest rates further, given inflation may stay high for some time.
That's according to prepared remarks the governor is delivering before the Calgary Chamber of Commerce on Thursday.
His speech comes one day after the central bank decided to hold its key interest rate steady at five per cent, as signs of a slowing economy grow.
Statistics Canada reported last week the economy shrank in the second quarter, while the unemployment rate has been rising for three consecutive months.
However, Macklem said on Thursday that the central bank's governing council agreed rates may need to rise again.
"In trying to balance the risks of under- and over-tightening, governing council decided yesterday to keep the policy rate at five per cent, and agreed there may be a need to raise the policy rate further if inflationary pressures persist," Macklem said.
Canada's inflation rate was 3.3 per cent in July, but the Bank of Canada expects inflation to flare up in the coming months before declining again.
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