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Special Report

Canada Inflation Research Brief

June 2022

Inflation Continues to Rise;
Spotlight Remains on High Turnover Assets

Inflation once again surpasses expectation. The Consumer Price Index increased by a multi-decade high rate of 7.7 per cent year-over-year in May, surpassing the consensus of 7.4 per cent. This is an increase of 90  basis points month-over-month, with expectations that inflation will surpass 8.0 per cent in June. Inflation pressure could prompt the Bank of Canada to raise the overnight rate up to 75 basis points next month following three hikes earlier this year. There are multiple factors driving the ongoing upward price movements resulting from the widespread economic shutdown associated with the still prevalent health crisis. Major driving factors include unprecedented fiscal stimulus, historically low interest rates, pent-up demand, increased savings and the persistent supply chain problems facing the global economy. 

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