Steve Scherer

OTTAWA (Reuters), – Monday’s Bank of Canada meeting will be renewed. The Bank of Canada expects to keep its monetary policy framework unchanged. Inflation targets are set at 2%, despite concerns over rising costs of living and uncertain COVID-19 prospects.

Inflation targets are reviewed by the central bank, finance ministry, and expire at the end of each year. For the past 30 years, it has been at the 2% middlepoint of the 1%-3% range.

The bank’s governor Tiff Macklem and finance minister Chrystia freeland will make an announcement at 10:00 EST (14500 GMT).

A source revealed to Reuters that Canada’s policymakers have avoided a big shift in monetary policy strategy, similar to one made by the U.S. Federal Reserve last January. But, the refreshed framework will incorporate new language regarding the importance and impact of employment on the economy.

Canada’s October inflation rates reached an 18-year peak of 4.7%. It was the seventh consecutive month in excess of the bank’s 1%-3.3% range. While the bank’s flexible approach allowed for jobs and economic recovery, supply-chain problems and increasing energy prices caused overall inflation to increase.

“Governor Macklem … was trying to tie what the bank was doing to labor market outcomes” since the early days of the pandemic, said Andrew Kelvin, chief Canada strategist at TD Securities, adding that introducing language on the importance of jobs will provide “more flexibility down the road.”

Rapid spread of Omicron Omicron coronavirus has hampered economic prospects. Canada claimed Friday that it had so far seen 87 cases.

This renewal of the monetary policies framework is coming just a day ahead of when the government will update its fiscal and economic forecasts in a fall economy statement.

According to Reuters, a source revealed that Justin Trudeau’s government would only outline limited spending plans in the document. The move comes amid rising inflation and calls for restraint from some business groups and politicians.

Statistics Canada’s November Consumer Price Report will be released Wednesday. Statistics Canada is expected to release the figures along with 11 analysts surveyed from Reuters, who forecast that inflation would accelerate to 4.8%.

Macklem will give his last speech for the year on Wednesday. This is after the bank had warned that on Thursday it was becoming increasingly worried about the causes of inflation such as disruptions in supply chains.