MNI: BOC Says Record 78% Of Firms See +3% Inflation Over 2 Yrs

Bank of Canada surveys of companies and households published Monday show record views of wage and price inflation over the next two years, and some firms say a recession may eventually result from higher interest rates.

The consumer price index will advance more than 3% over the next two years according to 78% of firms surveyed by the central bank, up from the prior record 70%. Firms also expect record wage gains of 5.8%.

"Some firms noted that an eventual recession, which they often attributed to higher interest rates, would support or be needed for a return of inflation to 2%," the Bank's target, the Business Outlook Survey said. 

Consumers predict inflation of 6.8% a year from now and 5% in two years, according to a separate survey. Households also predict interest rates may average 4.8% a year from now, up from 4% in the prior survey.