The Bank of Canada stated that one major upside risk to inflation is that businesses may pass on increased input costs to consumers, creating new price pressures. The bank also expressed concerns that its estimates of productivity could be "weaker than previously assumed," which would mean a smaller economic output gap and greater inflationary pressures. Downside risks to inflation listed by the Bank of Canada include the possibility of tighter global financial conditions and a weaker-than-expe

The Bank of Canada stated that one major upside risk to inflation is that businesses may pass rising input costs on to consumers, resulting in new price pressures. The bank is also concerned that its productivity estimates may be “weaker than previously assumed,” which would imply a smaller economic output gap and greater inflationary pressure. Downside risks to inflation outlined by the Bank of Canada include a potential tightening of global financial conditions and a domestic economic recovery that is weaker than expected. The Bank of Canada expects Brent crude oil prices to fall to around $70 by the end of 2027, and notes that the outlook for oil prices remains highly uncertain. This projection is based on the futures price curve as of July 9, which is slightly lower than the April forecast. Policymakers have also raised their expectations for exports, partly due to an increase in “energy-related activity.”