The Financial Post reports in its Tuesday, April 13, edition that inflation may still be a theoretical concern, but not a real one, as Canada's latest housing mania and surging commodity prices have not dislodged expectations that the Bank of Canada will keep prices under control. The Post's Kevin Carmichael writes that according to a Canadian Chamber of Commerce survey of 15,400 employers in January and February, only 14 per cent of companies planned to raise prices over the next three months, despite rampant anecdotal evidence of rising costs for inputs.
That aligns with Statistics Canada's latest inflation readings. It reported on April 12 that its "adjusted" Consumer Price Index rose 1.5 per cent in February from a year earlier, well below the BOC's target of 2 per cent. The BOC says, "Inflation has not become a bigger concern for Canadians, and the pandemic has not dramatically changed consumers' views on inflation." The Post says that is an important conclusion because inflation can be a self-fulfilling prophecy. The Post sees the BOC sticking to its current plans, which could involve slowing the pace of bond purchases, but still maintaining plenty of stimulus for the foreseeable future.
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