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Rampant inflation means Bank of Canada must raise rates above 3%: economist
inflation in the Canadian economy means the Bank of Canada will have to raise rates above three per cent to bring things back under control, suggests one economist.Don Drummond, an economist and fellow with Queen’s University, spoke with The West Block‘s Mercedes Stephenson and said while the Bank has been clearly signalling an intent to raise rates back between its normal two to three per cent range, that’s a “minimum” for what is needed.“I don’t think that will do the trick. I think the inflation pressures are too embedded,” he said.“They will have to raise their rates above three per cent.”Drummond’s comments come ahead of an expected update to the inflation rate in Canada this week.In April, the last month for which data is available so far, inflation hit 6.8 per cent in Canada — the highest level since 1991 — and an increase compared to the previous month.