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Explosive inflation in Canada isn’t going away anytime soon, says The Blacklock Reporter.
In fact, inflation will hit “close to 5%” this winter and stay above initial forecasts until 2023, Bank of Canada Governor Tiff Macklem said.
The last time inflation hit 5% was in 1991, when it hit 5.63%.
Macklem did not advocate raising interest rates to control prices.
“We recognize that inflation is actually likely to increase a bit more in the remaining months of this year,” Macklem said.
“It is currently around 4.5%. We think it will increase by almost 5%. Then, over the next year, we think it’s going to come back down. “
The Bank forecast inflation of around 3.4% next year “before gradually returning to the target in 2024” of around 2%.
“Inflation was around 4.5% in September and is expected to rise and average around 4.75% over the remainder of 2021,” analysts wrote.
Macklem said the Bank “is facing a very unusual situation” but would keep prices under control.
He did not explain how or if Canadians should expect higher interest rates anytime soon.
“Can you tell them what exactly is the plan?” Asked a reporter.
“I want to assure Canadians that we can and will keep inflation under control,” replied Macklem.
“We understand what our job is. “
“What’s the real danger here if they don’t believe this message?” Asked a reporter.
“Inflation will slow down,” replied Macklem.
The rising costs contradict repeated forecasts by the Bank and Macklem, including testimony before the House of Commons finance committee where he assured MPs:
- “If there is an unexpected rise in inflation, and I don’t expect that to happen, we have all the tools” (June 16, 2020);
- “Inflation is expected to remain below 2% in 2023” (November 26, 2020);
- “We expect inflation to rise further to the peak of our inflation control target of 1-3%” (April 27, 2021).
“We know that the higher prices are a challenge for Canadians and that it is more difficult for them to cover their bills,” Macklem said Wednesday.
“I want to assure you that inflation will not stay as high as it is today, although it will take a little longer to come down.”
Statistics Canada, in an Oct. 18 update on some average food prices, said annual price increases nationwide were up to 17% for oranges, 21% for apples, 22% for bacon, 28% for the chicken, 29% for the pork chops and 42% for the butter.
“Think about it, you have a finance minister who gave us hundreds of billions of dollars in inflationary deficits and more to come,” Conservative MP Pierre Poilievre (Carleton, Ont.) Told reporters.
Inflation means “higher costs for fuel, food and shelter,” he said.