Both central banks are trying to negotiate a soft landing, aiming to bring scorching-hot inflation in line without provoking a recession in their respective economies.
Last week, RBC broke rank from the Big Six banks by predicting that Canada is in for a recession by next year.
“Inflation, labour shortages and rising interest rates will drag on Canadian growth, pushing the economy into a moderate contraction in 2023,” wrote Nathan Janzen and Claire Fan of RBC Economics in a note Thursday.
In announcing today’s decision, the BoC pointed to the ongoing conflict in Ukraine, as well as supply disruptions and domestic price pressures from excess demand.
“The Governing Council continues to judge that interest rates will need to rise further, and the pace of increases will be guided by the Bank’s ongoing assessment of the economy and inflation,” the central bank said.
