The Bank of Canada's latest surveys reveal rising inflation expectations among businesses and consumers. The data also suggests that firms are increasingly planning to pass higher input costs on to their customers. Most of the survey results were collected before the collapse of US-Canada trade talks at the end of August, but the bank noted an overall improvement in business sentiment. Sales outlooks have brightened in the third quarter, contributing to a slight rise in the bank's outlook indicator to minus 0.33.
The surveys indicate that businesses are becoming more optimistic despite the recent trade tensions. The Bank of Canada highlighted that while the trade talks breakdown may have had some impact, the general business environment has shown signs of recovery. The slight improvement in the outlook indicator reflects this cautious optimism, even as inflation concerns grow.