‘Supersized’ Bank of Canada rate hike necessary to counter runaway wage, price increases, argue economists

'What they’re trying to do is cut it off at the pass now by being really aggressive and convince everyone that they’re not going to let inflation stay at these kind of levels,' says the Bank of Montreal's Douglas Porter.

Bank of Canada Governor Tiff Macklem, pictured during a press conference on Dec. 13, 2021. The central bank hiked its key interest rate by 100 basis points to reach 2.5 per cent on July 13, the largest such increase since 1998. The Hill Times photograph by Andrew Meade

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BY MIKE LAPOINTE

July 20, 2022

Following the Bank of Canada's largest single rate increase since 1998, economists say the fight now is making sure recent spikes in inflation don't become entrenched and ripple into runaway wage and price increases, with economist Armine Yalnizyan suggesting the “supersized” rate hike was about...

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