How much further will depend on how monetary policy is working to slow demand, how supply challenges are resolving and how inflation and inflation expectations are responding to this tightening cycle. Our decision reflected several considerations. First, inflation in Canada remains high and broad-based, reflecting large increases in both goods and services prices.
Inflation has come down in recent months, but we have yet to see a generalized decline in price pressures. Second, and related, the economy is still in excess demand-it's overheated. Job vacancies have declined from their peak but remain high, and businesses continue to report widespread labour shortages. Third, higher interest rates are beginning to weigh on growth.