Canada Economics Update New CPI weights will keep a lid on inflation The introduction of new CPI weights will prevent inflation from rising by as much as in the US but, with firms’ selling price expectations continuing to increase, the risks to inflation still seem to... 22nd July 2021 · 4 mins read
Canada Economics Bank tapers its asset purchases again The Bank of Canada’s decision to continue tapering its asset purchases today came as little surprise and we continue to expect the Bank to bring the QE program to a close by the end of this year. With... 14th July 2021 · 3 mins read
Canada Economics Labour shortages set to intensify Canadian firms are not currently suffering from labour shortages to the same extent as those in the US but, with immigration still muted, the issue is likely to get worse as the economy continues to... 30th June 2021 · 2 mins read
Canada Economics Update Bank likely to taper purchases again in July The Bank did not provide any new hints about the direction of policy in its statement today but, with GDP likely to start growing strongly again this month as the coronavirus restrictions are lifted... 9th June 2021 · 3 mins read
Canada Economics Update Bank may welcome strong loonie after inflation spike The Bank of Canada has voiced concern about the loonie although, following the signs of emerging inflationary pressures in April, it will probably be more welcoming of the disinflationary impact of... 20th May 2021 · 3 mins read
Canada Economics Update Inflation to be above 3% for most of the year We now expect inflation to surpass the upper limit of the Bank of Canada’s 1% to 3% range for most of the rest of the year, but we continue to think that it will drop back to less than 2% in 2022. 13th May 2021 · 4 mins read
Canada Economics Update Higher commodities prices another tailwind to growth The further strong rises in commodity prices present upside risks to our GDP forecasts, although the boost to growth is likely to be smaller than during previous periods of strong commodity price... 6th May 2021 · 4 mins read
Canada Economics Update Childcare plan could raise potential GDP growth The proposed national preschool system could increase the labour force, and therefore potential GDP, by 1.2%, but the impact will be spread over many years and might be dwarfed by changes to... 28th April 2021 · 4 mins read
Canada Economics Update Bank trims asset purchases, may hike in late 2022 The Bank of Canada’s decision to trim its asset purchases and pull forward its guidance on interest rates confirms that it has become more upbeat about the economic outlook. We expect it to bring its... 21st April 2021 · 3 mins read
Canada Economics Update Government sets out stimulus worth 4.4% of GDP The additional stimulus outlined in today’s Budget was in line with our expectations and, while a few of the proposals will raise eyebrows, the total package should help to support a strong economic... 19th April 2021 · 3 mins read
Canada Economics Update House prices vulnerable to higher interest rates House prices look increasingly vulnerable to future rises in interest rates. While the economy coped well the last time the Bank of Canada’s rate hikes shook the housing market in 2017 and 2018, the... 13th April 2021 · 4 mins read
Canada Economics Update Bank to cut the pace of its asset purchases next month The Bank of Canada seems to have signalled that it will reduce the pace of its government bond purchases at its next meeting in April. We now expect it to bring its net purchases to zero by the end of... 23rd March 2021 · 3 mins read
Canada Economics Update Bank unlikely to flinch as inflation moves above target We expect inflation to hit 3.5% in April and then to sit at the upper end of the Bank of Canada’s 1% to 3% target range for most of the rest of the year. Given the likelihood that inflation will drop... 18th March 2021 · 4 mins read
Canada Economics Update Bank remains committed to keeping yields low The Bank of Canada adopted a more upbeat tone in its latest policy statement but, given the slow vaccination program and the Bank’s concerns about the labour market, we doubt this is a signal that it... 10th March 2021 · 3 mins read
Canada Economics Update Broader labour market indicators still weak While labour market conditions are probably not quite as strong as the Labour Force Survey (LFS) measure of employment suggests, they do not seem to be as weak as the Survey of Payrolls, Employment... 9th March 2021 · 4 mins read
Canada Economics Update We expect oil to be the key driver for the loonie Given our latest forecast for oil prices, we now expect the Canadian dollar to rise further in 2021 than we previously thought, but to drop back a bit in 2022. 25th February 2021 · 2 mins read
