OTTAWA: The Bank of Canada says it’s tweaking how it will communicate inflation projections in its quarterly forecasts. Deputy governor Lawrence Schembri says the central bank’s monetary policy reports will no longer include projections for its core inflation measures, which are designed to help filter temporary factors affecting headline inflation.
Speaking at Western University in London, Ont., on Thursday, he said going forward the reports will only feature projections for headline inflation as a way to reassert the measure’s role as the bank’s target in its decisions on the trendsetting interest rate. The bank’s target range for headline inflation is between one and three per cent — and its reading plays a key role in interest rate decisions. Schembri says the inclusion of predictions for core inflation in the bank’s quarterly reports has fed a misperception that they are, in fact, the target. He says the core measures are only one set of factors that go into the bank’s assessment of pressures on inflation.
