Today’s business outlook survey confirmed that the Canadian economy is at full capacity:
· 77% of firms plan on hiring in 2022
· 78% of firms report difficulty in meeting unexpected demand
· Labour shortages reported across most sectors
· 67% of firms expect inflation to be 3% or higher
Conclusions:
· The Bank of Canada should be concerned by the inflation expectations
· While we think it’s unlikely, a January rate hike can not be ruled out.
· If they don’t raise the overnight rate this month, expect a clear signal for lift-off in March.
