The gap between inflation perceptions and reality

Why bridging the gap is important

We care about Canadians’ perceptions of inflation because their confidence in our ability to keep inflation low and stable helps us do our job better. When people trust the Bank to meet the inflation target, their beliefs and behaviours help keep inflation at the target by allowing the economy to stabilize after short-term bumps.

This is particularly important in times of trouble, like what we are experiencing now with the COVID‑19 pandemic. Because people’s inflation expectations are well anchored at 2 percent, our interest rate cuts have been effective in helping households and businesses get through these challenging times.

Communicating clearly and consistently about our inflation target and what we do to achieve it, as well as consulting Canadians to collect their views and opinions, is more important than ever.