Canadians expect higher inflation as Bank of Canada weighs hikes

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Defence Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeNewsEconomyCanadians expect higher inflation as Bank of Canada weighs hikes54% of Canadians think the yearly change in the CPI will be higher than the current 3% by this time next yearAuthor of the article:Laura Osman and Erik HertzbergBank of Canada building in Ottawa on Sept. 30, 2026. Photo by HYUNGCHEOL PARK/PostmediaA majority of Canadians expect inflation to increase over the next 12 months, a potentially worrying sign for the Bank of Canada as it weighs interest-rate hikes.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountA Nanos Research Group poll for Bloomberg News shows 54 per cent of Canadians think the yearly change in the consumer price index will be higher than the current three per cent by this time next year.That compares with about a third who said inflation would be about the same over that time. Just seven per cent said inflation would be lower.This advertisement has not loaded yet, but your article continues below.The data may add to central bankers’ worries as they assess whether consumer inflation expectations are detaching from the bank’s two per cent target.SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againThe results also speak to an “anxious, dour mood” among Canadians, said Nik Nanos, the polling firm’s founder and chief data scientist.“They realize that Canada only really has so much control over a lot of these big issues,” Nanos said in an interview.The longer that inflation expectations remain elevated, the greater the risk that Canadians start to build above-target inflation into their behaviour, such as asking for larger wage increases or bringing forward purchases, potentially adding to price pressures.Last month, Governor Tiff Macklem warned that if policymakers are slow to respond to sustained high inflation, the bank may have to hike even higher and at a faster rate.Raising borrowing costs unnecessarily, however, could weaken economic growth during a period of uncertainty, he said.Inflation in Canada started to rise with gasoline prices in February, as the war in Iran set off a global oil shock that drove up energy costs. The headline rate has held near three per cent — the cap of the bank’s control range for inflation — for months.This advertisement has not loaded yet, but your article continues below.Officials aren’t sure whether those high gas prices are feeding into broader price pressures in goods and services in the rest of Canada’s economy, and are debating whether the current policy rate of 2.25 per cent is sufficient to keep price pressures in check.Higher borrowing costs would restrain demand and weigh on consumption, helping to reduce the risk that higher energy prices feed into broader inflationary pressures.Traders in overnight swaps put the odds of the bank raising rates at its next meeting on Oct. 28 at about a third. They are expecting more than 100 basis points of hikes over the next 12 months.The Bank of Canada will also release business outlook and consumer surveys on Oct. 19 that will offer further insights into Canadians’ inflation expectations.Polling results were generally consistent across ages, genders and regions.The survey of 1,057 Canadians was conducted between Sept. 27 and Sept. 29 by telephone and online, and is considered accurate within three percentage points, 19 times out of 20.With assistance from Mario Baker RamirezThis advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.