OTTAWA – Inflation in Canada is increasingly broad-based and risks becoming entrenched, a senior Bank of Canada official said on Thursday, warning of “bumps along the way” in the fight against raging price increases.
Senior Deputy Governor Carolyn Rogers, speaking the day after the central bank increased its policy rate to a 14-year high of 3.25%, said Governing Council had discussed “the ongoing risk that inflation becomes entrenched” ahead of its decision.
“The Canadian economy continues to operate in excess demand, despite the recent pullback in housing, and inflationary pressures are increasingly broad-based,” Rogers said.
She reiterated interest rates needed to rise further without specifying how many more increases were to come.
“Getting inflation back to 2% will take some time. We also know there could be bumps along the way,” she told a business audience in Calgary, Alberta.
(Reporting by Julie Gordon, editing by David Ljunggren)
((Reuters ottawa bureau +1 480 7921; david.ljunggren@tr.com))
