OTTAWA, Feb 16 (Reuters) – The Bank of Canada will be nimble and potentially “forceful” in tackling uncomfortably high inflation, a senior official said on Wednesday, setting the stage for an aggressive campaign of interest rate increases.
Deputy governor Timothy Lane, speaking to a university audience, said there was a risk inflation could continue to be more persistent than forecast and the central bank was increasingly focused on countering the upside risks.
“We will be nimble — and if necessary, forceful — in using our monetary policy tools to address whatever situation arises, as we have done throughout these turbulent times,” Lane said.
Canada’s annual inflation rate hit a fresh 30-year high at 5.1% in January, official data showed on Wednesday. It was the 10th consecutive month the rate had been above the Bank of Canada’s 1-3% control range.
The central bank in January said the slack in Canada’s economy had been absorbed and interest rates would need to rise from their current record low of 0.25%. Governor Tiff Macklem has said Canadians should expect multiple increases.
(Reporting by Julie Gordon and David Ljunggren)
((Reuters Ottawa bureau, +1 647 480 7921; david.ljunggren@tr.com))
