Customers shop at a farmers' market in Mississauga, Ontario, Canada, on July 20, 2022. (Photo by Zou Zheng/Xinhua)
The central bank said in a press release that given the outlook for inflation, the Governing Council of the bank still judged that the policy interest rate will need to rise further.
OTTAWA, Sept. 7 (Xinhua) -- The Bank of Canada on Wednesday increased its benchmark interest rate by 75 basis points to 3.25 percent.
The central bank said in a press release that given the outlook for inflation, the Governing Council of the bank still judged that the policy interest rate will need to rise further.
The consumer price index eased in July to 7.6 percent from 8.1 percent because of a drop in gasoline prices. However, inflation excluding gasoline increased and data indicated a further broadening of price pressures, particularly in services, the bank said, adding that short-term inflation expectations remain high.
According to the bank, Canada's economy continues to operate in excess demand and labor markets remain tight.
Canada's gross domestic product grew by 3.3 percent in the second quarter, somewhat weaker than it had projected, however indicators of domestic demand were very strong with consumption up by about 9.5 percent and business investment up close to 12 percent, the bank said.
The bank expected the economy to moderate in the second half of this year, saying that global demand weakens and tighter monetary policy in Canada begins to bring demand more in line with supply.
Quantitative tightening continues and is complementing increases in the policy interest rate, the Bank of Canada said. ■
