Don’t’ be surprised if we see an interest rate hike this week.
That’s the message from the economists at ScotiaBank who say higher inflation flowing from rising oil and gasoline prices may push the Bank of Canada in that direction. While they say it is not a done deal, they think the run of lower or steady interest rates may be reversed.
But not all the major chartered banks economists are feeling the same way. RBC figures no increases are in the cards of the remainder of this year while over at CIBC they are hedging their bets, waiting to see how a higher US dollar plays out for those in Canada’s import-export sectors.
A lower Canadian dollar relative to its US counterpart can be inflationary as it costs us more to buy everything from fruit to manufacturing inputs, effectively importing inflation. On the other hand, a lower Canadian dollar makes our exports more attractive, something that can stimulate our economy which often leads to domestically-created inflation.
— For more than 50 years, Paul Martin has specialized in coverage of the business and political scenes. His career has spanned radio, television and print and electronic media.
