Bank of Canada Says Inflation Still Too High, But Moving in Right Direction

Inflation in Canada remains "too high" but is headed in the right direction, a Bank of Canada official said on Tuesday, adding that the central bank will do whatever is needed to bring price increases back to target, Reuters reported. Deputy Governor Paul Beaudry, speaking to university students in Waterloo, Ontario, said while some have suggested a recession might be needed to tame climbing prices, the central bank believed it could lower the risk of a hard landing by clearly communicating its intentions. "In August, inflation stood at 7%. While we're headed in the right direction, that's still too high," Beaudry said in prepared remarks provided ahead of the speech. "We will continue to take whatever actions are necessary to restore price stability for households and businesses and to maintain Canadians' confidence that we can deliver on our mandate of bringing inflation back to 2%," he added later. Inflation slowed again in August, though both headline and core measures remain far above target. Adding to the pinch for consumers, grocery prices rose at their fastest pace in 41-years. Central banks are concerned people may start to assume inflation will continue to rise faster than target, which could lead to price spirals. Read more.