The Bank of Canada says larger and more frequent price increases by businesses have contributed to keeping inflation higher than the Bank would like.
The comments were made by BoC Deputy Governor Nicolas Vincent during a speech on Tuesday on the topic of pricing practices and monetary policy.
Vincent said the way in which businesses set their prices has changed “substantially” since the pandemic.
“Price increases were larger than normal during this period, driven by the higher costs that firms were facing and helped along by strong demand,” he said, adding that the increases have been more frequent than normal. “We believe that this behaviour by firms—both here and abroad—is intimately linked to the stronger-than-expected inflation we’ve seen.”
After reaching a peak of 8.1% last June, headline CPI inflation then fell to a…