Demand created from a record influx of immigrants could be one factor keeping inflation higher for longer than anticipated, some economists say, though Bank of Canada governor Tiff Macklem doesn’t appear overly worried about it.
Sticky inflation prompted the Bank of Canada on July 12 to raise interest rates by 25 basis points to five per cent — the highest level since 2001. Though the inflation rate has fallen off its peak of 8.1 per cent last summer to 3.4 per cent in May, prices of more than half the goods in the consumer price index, such as meat, bread, coffee and rent, continue to rise, Macklem said in a press conference following the decision.
