The Financial Post reports in its Tuesday edition that inflation is too high in Canada, so the Bank of Canada needs to increase interest rates to slow spending and give the economy time to catch up, Governor Tiff Macklem said on Monday in a video posted by the central bank on Twitter. A Reuters dispatch to the Post reports that Mr. Macklem said, "Inflation is too high," in a video tagged #Asktheboc, echoing remarks made earlier this month after the central bank hiked its policy rate by 75 basis points to 3.25 per cent. "It is important that we get inflation back down so Canadians can plan their spending and their savings, and they don't get surprised by big changes in their cost of living." The BOC, like many of its global peers, is rapidly increasing interest rates in response to inflation running at levels not seen in decades. However, the bank has faced public criticism for increasing borrowing costs at a time when many Canadians are already struggling to afford groceries and other essentials. Mr. Macklem said in the video: "It is by raising interest rates that we're going to slow spending in the economy, give the economy time to catch up and take the steam out of inflation. That's gonna get inflation back down."
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