Bank of Canada Survey Records Notable Rise in Inflation Expectations

By Paul Vieira

OTTAWA--The deterioration of crossborder U.S.-Canada trade ties and continued Middle East tension has led to a sharp uptick in inflation expectations among Canadian firms, according to a quarterly business-outlook survey from the Bank of Canada.

Responses collected from Canadian companies after mid-August suggest firms anticipate inflation to hit 3.7% in the third quarter of 2027, or higher than the 3.2% expected prior to the collapse of trade talks between Ottawa and Washington on tariff relief. The rise in inflation expectations is tied to elevated energy prices stemming from the Middle East conflict, and the imposition of new tariffs on U.S. and Canadian goods, the Bank of Canada said.

"Inflation expectations have increased noticeably," the central bank survey said.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

October 19, 2026 11:31 ET (15:31 GMT)