A wage-price spiral, when higher wages and inflation continuously feed into each other, is something the Bank of Canada is trying to avoid From m_zadikian
As more and more workers demand higher pay in the face of sky-high inflation, economists are debating whether Canada is in for a wage-price spiral.
A new survey from consulting firm Eckler Ltd. found Canadian employers expect the national average base salary to rise 4.2 per cent this year, the highest in two decades. The survey, which was conducted between July and August and polled 269 Canadian firms across various sectors, said the results were similar to 2022 base pay increases.
Lovely said the central bank is “desperate” to prevent a wage-price spiral from taking hold since it requires an even tougher monetary policy response, resulting in greater damage to the economy.Brendon Bernard, senior economist, Indeed.com He acknowledged that a spiral could develop but added that rapid Bank of Canada interest rate hikes could “short circuit” that process.
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