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MNI INTERVIEW: Another 100BP Canada Hike Possible- Ex Adviser

(MNI) Ottawa
(MNI)

David Laidler says getting inflation down will require an interest rate exceeding CPI at some point.

The Bank of Canada could raise interest rates by another percentage point at the next meeting in September to help catch up with inflation according to David Laidler, a former adviser to the central bank and retired Western University professor.

The Bank's move Wednesday to 2.5% leaves borrowing costs well below inflation that's likely now between 8% and 9%, he said. While price gains are likely to slow, the overnight rate needs to exceed CPI at some point to check inflation, he said.

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The Bank of Canada could raise interest rates by another percentage point at the next meeting in September to help catch up with inflation according to David Laidler, a former adviser to the central bank and retired Western University professor.

The Bank's move Wednesday to 2.5% leaves borrowing costs well below inflation that's likely now between 8% and 9%, he said. While price gains are likely to slow, the overnight rate needs to exceed CPI at some point to check inflation, he said.

Keep reading...Show less