The perceived inflation is driven by consistent price increases in sectors such as food, gasoline, rent, and housing. Despite a recent deceleration in food price growth as indicated by the consumer price index, food inflation remains a major factor influencing overall inflation perception.
The rising cost of living has emerged as a major concern for Canadian consumers. Many attribute these increasing costs and the persistent high inflation to interest rate hikes by the Bank of Canada. These concerns are encapsulated in one respondent’s struggle with an escalating grocery bill while feeding a family of five.
Desjardins noted these persistent inflation expectations pose a challenge for the central bank. He predicted a “hawkish hold” stance from the Bank of Canada later this month. This indicates that while the bank acknowledges the inflation issue, it might not immediately act to combat it.
The survey also found that businesses plan larger and more frequent price increases than usual over the next year. About half of businesses are yet to return to normal pricing practices and anticipate that inflation will remain high and stay above 2% for more than three years.
Higher interest rates are reportedly impacting both businesses and households. More companies anticipate that increased borrowing costs will limit their sales and investment plans in the next year. Similarly, many households reported being affected by higher interest rates, leading to reduced spending due to these economic pressures.
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Source: Economy - investing.com
