{"id":28836,"date":"2022-12-07T19:53:27","date_gmt":"2022-12-07T19:53:27","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2022\/12\/07\/bank-of-canada-hikes-interest-rate-by-50-basis-points-to-4-25\/"},"modified":"2022-12-07T19:53:27","modified_gmt":"2022-12-07T19:53:27","slug":"bank-of-canada-hikes-interest-rate-by-50-basis-points-to-4-25","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2022\/12\/07\/bank-of-canada-hikes-interest-rate-by-50-basis-points-to-4-25\/","title":{"rendered":"Bank of Canada hikes interest rate by 50 basis points to 4.25%"},"content":{"rendered":"<div style=\"text-align:center\"><\/div><p> \n<\/p>\n<div id=\"\">\n<header aria-label=\"Beginning of Article\" class=\"article-header\">\n<div class=\"sponsored-meta sponsored-meta--story\" data-aqa=\"sponsorship\">\n<div class=\"sponsored-meta-content\">\n<div class=\"sponsored-meta-content-text\"> This section is <\/p>\n<div class=\"popover\" data-aqa=\"popover\" data-click-to-appear=\"True\" data-container=\"\" data-container-offset=\"\" data-popover-component=\"\" data-position=\"\"> <button class=\"popover__trigger\"> <span class=\"popover__text\"> Presented <\/span> <\/button> <\/p>\n<div aria-describedby=\"popover-desc-sponsored-popup\" class=\"popover__content\" hidden=\"\" role=\"dialog\">\n<div class=\"popover__content__wrapper\">\n<p> This section was produced by the editorial department. The client was not given the opportunity to put restrictions on the content or review it prior to publication. <\/p>\n<p> <button class=\"popover__content__close\" tabindex=\"-1\" title=\"Close\"> <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\" class=\"icon--close\" height=\"12\" version=\"1.1\" viewbox=\"0 0 12 12\" width=\"12\"><polygon points=\"12 0.95 11.05 0 6 5.05 0.95 0 0 0.95 5.05 6 0 11.05 0.95 12 6 6.95 11.05 12 12 11.05 6.95 6\"\/><\/svg><\/button> <\/div><\/div><\/div>\n<p> by  HSBC  <\/p><\/div>\n<div class=\"sponsored-meta-content-logo-container\">   <\/div><\/div><\/div>\n<nav aria-label=\"Breadcrumb\" class=\"breadcrumbs\" data-aqa=\"nav-breadcrumb\">\n<h2 class=\"visually-hidden\">Breadcrumb Trail Links<\/h2>\n<ol class=\"breadcrumbs__items list-unstyled\">\n<li class=\"breadcrumbs__item\"> News <\/li>\n<li class=\"breadcrumbs__item\"> Economy <\/li>\n<\/ol>\n<\/nav>\n<div class=\"article-header__detail\">\n<div class=\"article-header__detail__texts\">\n<p class=\"article-subtitle\"> Kevin Carmichael: Shift in language suggests next decision will be based on data, not a predetermined path <\/p>\n<div class=\"article-meta\">\n<div class=\"published-date\">\n<p>Publishing date:<\/p>\n<p> <span class=\"published-date__since\">Dec 07, 2022<\/span> \u00a0\u2022\u00a0 <span class=\"updated-date__since\">14\u00a0minutes ago<\/span> \u00a0\u2022\u00a0 <span class=\"published-date__word-count\">3 minute read<\/span> <\/div>\n<p>  <span class=\"comment-bubble\"> <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" height=\"16\" viewbox=\"0 0 24 24\" width=\"16\"><path d=\"M4,0 C2.93914,0 1.921718,0.421428 1.171572,1.171572 C0.421428,1.921718 0,2.93914 0,4 L0,24 L3.846,20.158 L4,20.16 L20,20.16 C21.0608,20.16 22.0782,19.73858 22.8284,18.98842 C23.5786,18.23828 24,17.22086 24,16.16 L24,4 C24,2.93914 23.5786,1.921718 22.8284,1.171572 C22.0782,0.421428 21.0608,0 20,0 L4,0 Z M2,4 C2,3.46956 2.21072,2.96086 2.58578,2.58578 C2.96086,2.21072 3.46956,2 4,2 L20,2 C20.5304,2 21.0392,2.21072 21.4142,2.58578 C21.7892,2.96086 22,3.46956 22,4 L22,16.16 C22,16.69044 21.7892,17.19914 21.4142,17.57422 C21.0392,17.94928 20.5304,18.16 20,18.16 L4,18.16 L3.048,18.126 L2,19.174 L2,4 Z\"\/><\/svg><\/span> <span class=\"article-meta-comment-count__text\"> 17 Comments <\/span>  <\/div><\/div>\n<figure class=\"featured-image\" data-aqa=\"featured-image\"><picture class=\"featured-image__ratio\"><img loading=\"lazy\" decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph.jpg?quality=90&strip=all&w=288&h=216&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"Bank of Canada governor Tiff Macklem announced the rate decision today.\" class=\"featured-image__image type:primaryImage\" height=\"750\" fifu-data-src=\"https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph.jpg?quality=90&strip=all&w=288&h=216&ssl=1\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph.jpg?quality=90&strip=all&w=288&h=216,\n                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/tiff-macklem-1207-ph.jpg?quality=90&strip=all&w=576&h=432 2x\" width=\"1000\"\/><\/picture><figcaption class=\"featured-image__caption image-caption\"><span class=\"caption\">Bank of Canada governor Tiff Macklem announced the rate decision today. <\/span> <span class=\"credit\">Photo by REUTERS\/Patrick Doyle<\/span> <\/figcaption><\/figure>\n<\/div>\n<\/header>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>The Bank of Canada might be finished raising interest rates.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment9125254244289608703119317392162816\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment9125254244289608703119317392162816\">Advertisement 2<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-2\">\n<div class=\"ad__inner__container\" data-ad=\"[[6,6],[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-interscroller=\"6x6\" data-ad-loc=\"2\" data-ad-mobile=\"[[6,6],[320,50],[300,50],[300,250],[300,600]]\" data-aqa=\"advertisement\" id=\"ad-2\" style=\"--desktopHeight:250px;--mobileHeight:600px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p data-async=\"\">Governor Tiff Macklem raised the benchmark interest rate a half-point on Dec. 7, which surprised some Bay Street economists who thought the central bank would opt to taper a series of outsized increases to avoid causing undue damage to the economy.<\/p>\n<\/section>\n<div class=\"article-content__widget-group article-content__widget-group--content-slot6 article-content__widget-group--newsletter-slot\">\n<section aria-labelledby=\"FinancialPostTopStories6678065934213193153744550999621632\" class=\"newsletter-widget fp-headlinenews background--primary-light-gradient\" data-account-id=\"b9d3df2fccd108b5eff3c44f573b2cd6\" data-aqa=\"widget-newsletter\" data-newsletter=\"single\" data-newsletter-component=\"\" data-target-list=\"FP_HeadlineNews\" data-widget=\"newsletter\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/06\/FPTopStories-06232021.jpg?ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/06\/FPTopStories-06232021.jpg?ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/06\/FPTopStories-06232021.jpg?ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/06\/FPTopStories-06232021.jpg?ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/06\/FPTopStories-06232021.jpg?ssl=1&w=320&resize=320&ssl=1 320w, 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You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300 <\/small> <\/div>\n<div class=\"js-submit-success\" hidden=\"\" id=\"submitSuccessFP_HeadlineNews\">\n<h3 class=\"newsletter__feedback--heading\">Thanks for signing up!<\/h3>\n<p class=\"newsletter-widget__text\">A welcome email is on its way. If you don&#8217;t see it, please check your junk folder.<\/p>\n<p class=\"newsletter-widget__text newsletter__feedback--last\">The next issue of Financial Post Top Stories will soon be in your inbox.<\/p>\n<\/p><\/div>\n<p class=\"newsletter-widget__text js-submit-error\" hidden=\"\" id=\"submitErrorFP_HeadlineNews\"> We encountered an issue signing you up. Please try again <\/p>\n<\/p><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<figure class=\"embedded-image\" data-aqa=\"embed-image\"><picture class=\"embedded-image__ratio\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/boc-1207-2022.jpeg?quality=90&strip=all&w=288&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/boc-1207-2022.jpeg?quality=90&strip=all&w=288&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/boc-1207-2022.jpeg?quality=90&strip=all&w=288&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/boc-1207-2022.jpeg?quality=90&strip=all&w=288&ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/boc-1207-2022.jpeg?quality=90&strip=all&w=288&ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/boc-1207-2022.jpeg?quality=90&strip=all&w=288&ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/boc-1207-2022.jpeg?quality=90&strip=all&w=288&ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/boc-1207-2022.jpeg?quality=90&strip=all&w=288&ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/boc-1207-2022.jpeg?quality=90&strip=all&w=288&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/boc-1207-2022.jpeg?quality=90&strip=all&w=288&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/boc-1207-2022.jpeg?quality=90&strip=all&w=288&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"\" class=\"embedded-image__image lazyload\" fifu-data-src=\"https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/boc-1207-2022.jpeg?quality=90&strip=all&w=288&ssl=1\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/boc-1207-2022.jpeg?quality=90&strip=all&w=288,\n                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/12\/boc-1207-2022.jpeg?quality=90&strip=all&w=576 2x\" height=\"763\" loading=\"lazy\" width=\"1000\"\/><\/picture><\/figure>\n<p>But just as many analysts predicted the Bank of Canada would continue its assault on the biggest inflation scare since the 1980s, noting that mission is far from complete. A decision to return to a typical quarter-point change in policy would have sent a message that Canada\u2019s central bankers were losing their nerve, risking a scenario where large swaths of the public would conclude inflation wouldn\u2019t be coming down.<\/p>\n<\/section>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>Macklem offered something to both camps, demonstrating his determination to crush price pressures with another \u201cjumbo\u201d increase, but also signalling that he\u2019s prepared to pause and assess now that the benchmark interest rate is at 4.25 per cent, four percentage points higher than at the start of the year.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment7252472114221197004787224468783104\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment7252472114221197004787224468783104\">Advertisement 3<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-3\">\n<div class=\"ad__inner__container\" data-ad=\"[[7,7],[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-interscroller=\"7x7\" data-ad-loc=\"3\" data-ad-mobile=\"[[7,7],[300,250],[320,50],[300,50]]\" data-aqa=\"advertisement\" id=\"ad-3\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>\u201cLooking ahead, Governing Council will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target,\u201d the statement said.<\/p>\n<p>That language represents a shift from explicit guidance that interest rates were headed higher no matter what.<\/p>\n<p>Now, the Bank of Canada is saying that 4.25 per cent might represent something of a sweet spot: an interest-rate setting that will deter households from continuing their post-pandemic spending spree, but maybe not by so much that weaker demand turns into a spike in unemployment.<\/p>\n<p>The central bank\u2019s moves from here will be based on data, not a predetermined path where the only question ahead of a policy meeting was how high? The option of pausing will be on the table when Macklem and his deputies next meet ahead of their Jan. 25 decision, depending on how the data breaks over the next six weeks.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment1832842570782869802300394256203776\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment1832842570782869802300394256203776\">Advertisement 4<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-4\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"4\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-4\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>\u201cGoverning Council continues to assess how tighter monetary policy is working to slow demand, how supply challenges are resolving, and how inflation and inflation expectations are responding,\u201d the statement said.<\/p>\n<blockquote class=\"\">\n<p>Growth will essentially stall through the end of this year and the first half of next year<\/p>\n<\/blockquote>\n<p>There\u2019s no question the economy is slowing and could be on the verge of tipping into a recession.<\/p>\n<p>Housing investment, the main driver of economic growth for more than a decade, has plunged this year as the central bank took the steepest path to higher interest rates in its history. Consumer spending, which accounts for almost 60 per cent of gross domestic product, contracted in the third quarter.<\/p>\n<p data-async=\"\">But the Bank of Canada has decided to risk a downturn if that\u2019s what it takes to get inflation under control. Data since the policymakers last met \u201csupport the bank\u2019s outlook that growth will essentially stall through the end of this year and the first half of next year,\u201d the central bank said in explaining its latest policy decision.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment4628672149167510520364801170866176\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment4628672149167510520364801170866176\">Advertisement 5<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-5\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"5\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-5\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>Cost pressures are relenting, but not enough for a central bank whose primary mission is price stability. The consumer price index is hovering around seven per cent, down from the peak of 8.1 per cent this summer, but still dangerously above the Bank of Canada\u2019s target of two per cent year-over-year increases.<\/p>\n<p>Inflation burst out of the Bank of Canada\u2019s comfort zone last year because of surging commodity prices and supply constraints. But now, those increases are showing up in the goods and services that most people buy. \u201cCore\u201d inflation, which corrects for volatility and provides a better reading on the trend, is around five per cent, also dangerously above the target.<\/p>\n<p>\u201cThe longer that consumers and businesses expect inflation to be above target, the greater the risk that elevated inflation becomes entrenched,\u201d the statement said.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment9778257485736728568192031917080576\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment9778257485736728568192031917080576\">Advertisement 6<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-6\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"6\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-6\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p data-async=\"\"><em><strong>Want to join the conversation on inflation? Click here to go straight to our comment section and have your voice heard<\/strong><\/em><\/p>\n<p>Macklem\u2019s decision will be controversial, especially with labour unions, which have mounted an unusually vocal campaign against the central bank\u2019s fixation with its inflation target.<\/p>\n<p>But the Bank of Canada is certain that a mild recession over the next few months would be preferable to what could follow a period of elevated inflation.<\/p>\n<p>Policymakers observed that growth in the third quarter was \u201cstronger than expected,\u201d and the economy continues to \u201coperate in excess demand.\u201d That suggests the economy had enough momentum to push through the headwinds caused by higher borrowing costs. With inflation so far from target, the central bank had little choice but to make those headwinds stronger.<\/p>\n<p>\u201cWe are resolute in our commitment to achieving the two per cent inflation target and restoring price stability for Canadians,\u201d the statement said.<\/p>\n<p data-async=\"\"><em>\u2022 Email: kcarmichael@postmedia.com | Twitter: <a class=\"twitter-follow-button\" data-evt=\"click\" data-evt-typ=\"click\" data-evt-val=\"{\" control_fields=\"\" link=\"\" href=\"https:\/\/twitter.com\/carmichaelkevin\" rel=\"nofollow noopener\" target=\"_blank\">CarmichaelKevin<\/a><\/em><\/p>\n<p> <iframe loading=\"lazy\" frameborder=\"0\" height=\"1200\" id=\"\" src=\"https:\/\/modules.wearehearken.com\/financial-post\/embed\/9439\/share\" style=\"--height: 1200px; \" width=\"\"><\/iframe> <\/p>\n<\/section>\n<section class=\"article-content__share-group article-delimiter\" data-evt=\"beforeunload\" data-evt-typ=\"page_scroll\" data-evt-val=\"{\" control_fields=\"\">\n<h2 class=\"visually-hidden\">Share this article in your social network<\/h2>\n<\/section>\n<div class=\"article-content__ad-group\">\n<div class=\"ad__section-border ad__section-border--category visually-hidden\">\n<section aria-describedby=\"advertisment7301923264803101573343756656050176\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment7301923264803101573343756656050176\">Advertisement <\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-acceptable\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-acceptable=\"\" data-ad-loc=\"1\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-acceptable\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div><\/div>\n<footer aria-label=\"Article Comments\" class=\"article-footer\">\n<section class=\"comments__section\" data-aqa=\"viafoura-comments\" id=\"comments\">\n<h3 class=\"widget-title comments-anchor\" id=\"comments-area\">Comments<\/h3>\n<p class=\"comments__section-disclaimer\"> Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications\u2014you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings. <\/p>\n<\/section>\n<\/footer>\n<\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/>\n<br \/>Bank of Canada hikes interest rate by 50 basis points to 4.25%<\/a><br \/>\n<br \/>2022-12-07 19:53:27<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This section is Presented This section was produced by the editorial department. 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