Results from the Business Outlook Survey and the Business Leaders’ Pulse show that overall business conditions remain subdued, but firms are beginning to anticipate improvements in activity. Sales outlooks continue to show signs of improvement after a period of weakness. Yet many businesses still have spare capacity, which is reducing their need to expand. Firms expect cost growth, including wages, to soften further. Expectations for inflation moved slightly higher but remain within the Bank of Canada’s target range.

Results from the CSCE show that consumer sentiment improved this quarter, mainly due to recent interest rate cuts and the expectation of further cuts ahead. Consumers reported stronger spending plans. Still, they reported that high prices of many goods and services, economic uncertainty and elevated housing costs continue to weigh on spending decisions. Consumer confidence in the labour market has weakened and is now slightly below the survey average. Consumers’ inflation expectations have largely returned to historical norms.

The Bank of Canada’s exceptional policy actions during the COVID-19 pandemic provided important support for the economy during the unprecedented shock, says a review published today.

Deputy Governor Toni Gravelle provides an update on when quantitative tightening will end and how the Bank of Canada will manage its balance sheet after that.

This is an account of the deliberations of the Bank of Canada’s Governing Council leading to the monetary policy decision on December 11, 2024.