Good Morning!
It’s Bank of Canada week again and while governor Tiff Macklem and his team have been preparing for Wednesday’s decision, signals have been piling up that Canadians will be looking at a 75-basis-point hike this week, the largest single rise since the 1990s.
In its policy statement last month when the Bank hiked 50 basis points (bps) for the second time, it said it was “prepared to act more forcefully if needed to meet its commitment to achieve the 2% inflation target.”
Data since then suggest “there is a strong chance it will follow through on that hint,” writes Capital Economics’ Stephen Brown.
Inflation came in higher than expected in May rising to 7.7%, a 39-year high. Capital estimates inflation rose to 8.3% in June, averaging 7.6% in the second quarter, much higher than the 5.8% that the Bank forecast in April.
Wages are also on the rise, up 5.2%…
