A majority of Canadians remain skeptical that higher consumer prices will moderate and move lower this year, according to a new poll by Nanos Research.
Canadians remain doubtful that inflation will be reigned in anytime soon even though the Bank of Canada has begun to raise interest rates. Inflation in Canada currently sits at a 30-year high of 5.7%.
A total of 58% of respondents still say they lack confidence inflation will return to more normal levels, down from 64% in November. Another area of concern is that for some segments of the population — particularly young people — inflation expectations are hardening.
Only 20% of Canadians between the ages of 18 and 34 are confident inflation will return to normal. That’s down from 26% three months ago. Younger Canadians are more likely to say they are being hurt by inflation.
The share of Canadians who are “somewhat confident” that inflation will return to more normal levels sits at 37%, up from 31% last November, according to the latest poll.
The Nanos poll is a survey of 1,000 Canadians, with a margin of error of 3.1 percentage points, taken between March 18 and 20.
Earlier in March, the Bank of Canada raised its benchmark interest rate to 0.5% from the historic low of 0.25% set after Covid-19 hit North America.
Markets are anticipating the benchmark rate will climb to almost 3% over the next 12 months, potentially with a half-point increase at the next Bank of Canada meeting on April 13.
Economists from Citigroup (C) and Bank of America (BAC) now forecast that Canada’s central bank will raise its trendsetting policy rate 150 basis points to 2% by July of this year.