The Candyman cometh

Recent accusations from some that Governor Stephen ‘Candyman’ Poloz is the prime reason for households’ debt binge in the past decade are unlikely to sway the Bank of Canada’s decision next week. With the outlook slowly improving, we expect the Bank to keep policy unchanged.
Stephen Brown Senior Canada Economist
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Canada Economics Weekly

New CPI weights could keep a lid on inflation

The introduction of new weights for the June CPI means that some of the item-specific price increases that we expect will not push up headline inflation by as much as we thought. Nevertheless, there still seems scope for inflation to rise to 4% over the summer.

18 June 2021

Canada Data Response

Consumer Prices (May)

The rise in inflation to 3.6% in May was driven by several factors including ongoing global supply constraints, the booming housing market, and the start of the re-opening process. While inflation is unlikely to rise further this month, it looks set to increase toward 4% later in the summer.

16 June 2021

Canada Data Response

Manufacturing Sales (Apr.)

Manufacturing sales volumes slumped 3.3% m/m in April, as the disruption from the global semiconductor shortage intensified. While sales volumes should gradually rise again from May, it will be some time before overall manufacturing activity returns to its pre-pandemic level.

14 June 2021

More from Stephen Brown

Bank of Canada Watch

Bank to wait until July before tapering again

Inflation surpassed the upper limit of the Bank of Canada’s target range in April but, with second-quarter GDP growth set to be weaker than the Bank expected and Governor Tiff Macklem concerned about the strength of the loonie, the Bank is unlikely to present a more hawkish policy statement or cut its asset purchases again next week.

2 June 2021

Canada Data Response

GDP (Q1)

The first-quarter data confirm that the economy took the second coronavirus wave in its stride but, with the preliminary estimate showing that GDP fell in April, the third wave has been much more disruptive.

1 June 2021

Canada Economics Weekly

Hot economy summer

The re-opening plans set out in the last couple of weeks point to strong gains in GDP over the summer. Given supply constraints, we expect the increase in activity to result in higher inflation than most expect.

28 May 2021
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