The unchanged GDP reading in August and projected 0.1% m/m fall in September implies that the economy grew by 1.3% annualised in the third quarter. This is not only far below the Bank of Canada’s upwardly revised 2.0% forecast but even lower than our pessimistic 1.5% figure. Acting also as a weak handover to the fourth quarter, this supports our view that the next rate hike won’t come until 2027 – even with the Bank’s emphasis increasingly on the upside risks to inflation.
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