Indeed, the Bank of Canada's July Monetary Policy Report Update noted that there were upward pressures on inflation, and that the growth of household and business credit, as well as the growth of monetary aggregates, was robust.
We therefore raised the policy interest rate to 4.5 per cent and expressed the view that "some modest further increase in the overnight rate" might be required to bring inflation back to target over the medium term. As for market liquidity, it had generally been growing over the past few years.