Canadians are unconvinced that policy makers will be able to rein inflation back to pre-pandemic levels, a worrying development that could reinforce the need for the Bank of Canada to be vigilant about price pressures.
A large majority of Canadians, or 63.5%, say they lack confidence that inflation will return to more normal levels, according to a survey by Nanos Research Group for Bloomberg News.
Just under a third, or 30.6%, believe that price increases — currently running at a yearly clip of 4.7%, the highest since 2003 — will come down to pre-pandemic trends, while 5.9% are unsure.
This pessimism has become particularly apparent when it comes to Canadians’ expectations for the economy, Nanos Research said.
“With an increased focus on inflation and on the new Omicron [variant] emerging, the proportion of Canadians who believe the Canadian economy will be weaker in the next six months has hit a 10-month high,” said Nik Nanos, chief data scientist at Nanos research.
Only 25.38% of Canadians polled said that they are looking forward to a stronger economy in the next six months, while 38.57% are bracing for weakness and 28.21% are expecting a stagnant economy.
More than half of respondents (56.57%) said that they are expecting home prices in their neighborhoods to increase in the next six months, while 30.22% believe that prices will remain static and 8.76% said that they are preparing for lower prices.