Oxford Economics expects Canadian core inflation to stay below 2% for the remainder of 2026, citing spare capacity, slowing population growth and business and household uncertainty from U.S. trade policy, the Middle East conflict and AI deployment. Economist Michael Davenport said the BOC would need to see "clear signs of broadened inflation" across the CPI basket and a rise in long-term inflation expectations to justify rate hikes this year. Oxford's baseline anticipates a 50bp BOC policy rate

Oxford Economics expects Canadian core inflation to stay below 2% for the remainder of 2026, citing spare capacity, slowing population growth and business and household uncertainty from U.S. trade policy, the Middle East conflict and AI deployment. Economist Michael Davenport said the BOC would need to see "clear signs of broadened inflation" across the CPI basket and a rise in long-term inflation expectations to justify rate hikes this year. Oxford's baseline anticipates a 50bp BOC policy rate increase in 1H 2027, but Davenport said that outlook depends on the outcome of U.S.-Canada trade talks.