Bank Of Canada Head Says Unclear How Quickly Inflation Will Drop

• Bank of Canada Governor Tiff Macklem said on Wednesday that there was uncertainty about how quickly inflation would come back down due to the unique nature of the COVID-19 pandemic, which has helped to drive up prices. 
• He reiterated that interest rates would have to start going up this year to tackle inflation, which is currently 4.8%, more than double the central bank's 2.0% target. With labour markets tightening and evidence of capacity pressures increasing, rate rises are essential. 
• The bank said last week the economy no longer needed help to deal with the effects of the COVID-19 pandemic, but kept rates steady at a record low 0.25%. The Governor expressed confidence that inflation will come down, further stating that it will peak at about 5.0% in the first half of 2022 before starting to decrease.

(Source: Reuters)