The Bank of Canada maintained its overnight rate at 4.5 per cent in their April 12th announcement. In the accompanying statement the Bank noted that demand in Canada still exceeds supply, labour markets remain tight and that first quarter economic growth appears stronger than expected.
However, the Bank expects consumption growth to slow in 2023 as households renew mortgages at higher rates and growth in exports and investment decline as the US economy slows substantially in coming months.
On inflation, the Bank expects headline CPI (Consumer Price Index) inflation to fall to 3 per cent mid year before slowly declining to 2 per cent by the end of 2024. The Bank did warn getting inflation back to 2 per cent will be challenging given still high inflation expectations, higher service sector prices and strong wage growth.
BC's minimum wage increases in June 2023.