Senior deputy governor Carolyn Wilkins spoke at the Asper School of Business yesterday and said that there are some good signs in the economy, including adapting to lower oil prices, growth in a range of industries, and growth in the labour market.
“What’s encouraging is that this growth is not being driven by just a few key industries,” Senior Deputy Governor Wilkins said. The data show that more than 70 per cent of industries have been expanding and the labour market continues to improve.
However, inflation is below the bank’s target and Ms. Wilkins said to meet its objectives, the bank will need to assess current economic conditions and how they will evolve.
She added that monetary policy must “anticipate the road ahead” noting that rather than having to “slam on the brakes” things need to be done slowly.
The comments are a hint that interest rates could be on the way sooner than the mid-2018 expectation of analysts, to allow for smaller, gradual increases.
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The next policy move from the Bank of Canada could be a rise in interest rates.