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Short-Term Inflation Expectations Ease Further But Job Not Done Yet

CANADA DATA
Business inflation expectations continue to ease back towards longer-term measures, although all remain above the 2% inflation target. Similarly, 53% of firms expect CPI inflation to still be 3% or above over the next two years from 64% prior.
  • BOS 2Y 3.3% from 3.5% in Q2 and 3.9% in Q1 – new lowest since 3Q21
  • BLP 1Y 3.4% from 3.8% in Aug and 3.8% at the time of the Q2 survey
  • BLP 2Y 2.73% from 2.81% in Aug and 2.76% at the Q2 survey – lowest figure for its short history.
  • BLP 5Y 2.5% from 2.53% in Aug and 2.45% at the Q2 survey – it keeps to the 2.5% +/- 0.2pps seen in its short history.
  • (BLP = Business Leader’s Pulse for a higher frequency measure)
  • Wage expectations over next year: 4.3% in Q3 from 4.48% in Q2 and 4.67 in Q1, lowest since 2Q21 vs high of 5.84 2Q22.
  • BOS survey taken Aug 14 – Sep 8 after the BoC had hiked 2x25bp at Jun 7 and Jul 12 meetings to 5%.

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