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Bank of Canada: Recession Odds Double, Inflation Hits 3.2%

7/7/2026

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Summary

Story summary

The Bank of Canada said inflation expectations fell after the U.S.–Iran interim peace deal, while recession expectations rose to 17% from 9%.
May's business outlook indicator dropped to –0.39, improving from –2.41 a year earlier, as the bank added activity and price indicators.
Statistics Canada data showed May inflation rose to 3.2%, the sharpest increase in over two years, while firms reported eased tariff uncertainty and fewer held-back orders.

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Story summary

The Bank of Canada said inflation expectations fell after the U.S.–Iran interim peace deal, while recession expectations rose to 17% from 9%.
May's business outlook indicator dropped to –0.39, improving from –2.41 a year earlier, as the bank added activity and price indicators.
Statistics Canada data showed May inflation rose to 3.2%, the sharpest increase in over two years, while firms reported eased tariff uncertainty and fewer held-back orders.