Bank of Canada Sounds Alarm on Gas Prices, Warns of Inflation Risk
The Bank of Canada's governing council has expressed concern about high gas prices and their potential impact on inflation. In a recent summary of deliberations, officials stated that while they have not yet seen higher gas prices spreading to other goods and services, it is increasingly likely to happen if fuel costs remain elevated.
According to the bank, policymakers held the policy rate at 2.25% for a seventh consecutive time in their latest meeting, but Governor Tiff Macklem struck a hawkish tone, saying inflation was too high and that upside risks had increased.
The officials noted that while they have looked through the direct impact of gas prices, there is uncertainty about the likelihood and magnitude of spillover into broader prices given current economic conditions.