Bank of Canada suggests 'firms abroad' are keeping prices high - BNN Bloomberg

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The Bank of Canada has started looking more closely at the role of company profits in its fight against persistent inflation, and the idea was gestured at again on Wednesday along with news of the latest interest rate hike.

“Some possible explanations behind the stronger-than-expected goods price inflation include … slower normalization of pricing behaviour by firms abroad,” the report said. “Strong global demand may have motivated businesses to pass through ongoing cost reductions more slowly than anticipated, partly explaining higher-than-expected import prices in 2023.”

Robson also said she found it “strange” that the Bank is “speculating” about firms potentially being slow to pass increased input costs on to consumers, when her own“They’re clear that they made pricing choices in 2022 that are paying off today in higher overall revenues and are happy these are off-setting lower volumes of sales,” she said.

“I don't see any evidence that they're following through on that,” Stanford told BNNBloomberg.ca in a telephone interview.

 

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