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The increase of interest rates according to BoC in 2024

The increasing of interest rates according to BoC in 2024

On Monday, Reuters news agency reported the expectations of the increasing interest rates according to BoC, in light of business growth surveys related to the third quarter of the year, which stipulate that interest rates will rise according to consumer expectations, during the next 12 months.

A third of companies operating in Canada have published their expectations that Canada will enter a state of economic recession similar to the situation in the second quarter of this year.
While future sales indicators maintain moderate forecast levels, the balance of opinion in the third quarter recorded a remarkable stability compared to +8.

A comprehensive review of the increase of interest rates according to BoC

27% of Canadian businesses share the view that it will take more than 3 years to return to the 2% inflation target that been set by BoC, a decrease of 32% when compared to the second quarter.
While 53% of operating companies expect inflation to maintain levels higher than 3% over the next two years, a decrease of approximately 32% from the second quarter.

Read more Banks Rebound Strongly in 2023 Amidst Banking Crisis

70% of companies operating in a wide range of business sectors indicated the negative impact that interest rates had on them.

While 80% of companies concluded that the effects of tightening due to previous monetary policies are still affecting their business and that they have not ended yet.

Companies also recorded levels below their usual average with regard to employment intentions, while, when compared with the third quarter of 2022, in the same context, they indicate a severe decline in the severity of the labor shortage.

The Business Expectations Survey Index recorded a value of -3.51%, which is the lowest level recorded since the second quarter of 2020, when it was -2.31% (from -2.15%).

Regarding wage growth, companies expect a gradual easing over the next 12 months.

The proportion of Canadians who expect a recession to occur next year has increased, reaching 55% from 50% in the second quarter.

Consumer expectations for inflation over the next five years fell to 2.75% from 2.89% in the second quarter.

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