Bank of Canada to lift inflation forecast as oil prices surge

Bank of Canada Governor Tiff Macklem expects the central bank to raise its inflation forecast this month as elevated oil and fuel prices, shipping disruptions and refinery damage increase the risk that inflation spreads and persists. The Bank will assess the outlook when it announces its rate decision and updated forecasts on October 28; Macklem said it is prepared to adjust policy if inflation does not move back toward its 2% target on its own. Higher oil prices also benefit Canada as an energy exporter by boosting export income, profits and investment, although they raise costs for households and businesses; markets were not expecting a rate change in October or December but were pricing in increases next year.