A survey by the Bank of Canada shows that inflation expectations have declined, further opening up space for interest rate cuts.

Jin10 data October 21: Some details in the Bank of Canada's third quarter business outlook survey have made analysts more confident that the risks of rising inflation are under control, which should provide room for decision-makers to cut interest rates again and inject momentum into the economy. The survey shows that short-term inflation expectations have fallen below the highs seen earlier this year. The percentage of businesses expecting inflation to exceed 3% over the next two years dropped from 23% last quarter to 18%; the percentage expecting inflation to fall below the 2% target rose to 21%, up from 12% previously. Businesses expect wage growth to slow over the next 12 months, although the extent is less than in previous quarters. At the same time, businesses expect input costs to rise over the next year, but the report notes that weak demand from businesses and households is limiting their ability to raise prices.