KPMG Canada chief economist Ali Jaffery said he is not inclined to support a BOC
rate hike on Wednesday but would not call such a move a policy mistake. He noted
that despite job losses and softer market sentiment, the central bank appears
intent on pre-empting inflationary pressure from persistently high oil prices.
Jaffery said a 25bp hike followed by another would keep the policy rate within
the BOC’s estimated neutral range. He added a hike could prolong the economy’s
weakness, though officials may judge there are sufficient positive factors to
sustain growth.
