Respondents to the Bank's Business Outlook Survey say it's becoming easier to find the workers they need, which suggests that the tightness in the labour market is beginning to ease. Past policy rate increases are working their way through the economy and restraining demand. Higher interest rates are slowing household spending, particularly on big-ticket items.
As mortgages are renewed at higher rates, more households will feel the restraining effects of monetary policy. Business investment is also expected to soften in the year ahead, dampened by weaker demand for Canadian exports and higher financing costs.