Canadian business confidence weakens as recession fears mount: Bank of Canada survey

OTTAWA, Oct 17 (Reuters) – Business confidence in Canada has weakened, with many companies expecting slower sales growth amid rising interest rates and cooling demand, and a majority now see a possible recession in the next 12 months, a Bank of Canada survey showed. The recession showed on Monday.

The third-quarter business outlook survey showed business inflation expectations remained high, although there were tentative signs that price and wage pressures were easing. Meanwhile, another survey found that consumers expect prices to rise faster in the near term, despite easing long-term expectations.

Despite the bleak outlook, business sentiment remains positive. The survey found that companies linked to real estate activity expect higher interest rates to hurt their sales, while others are now expecting slower – albeit healthy – sales growth.

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“While many companies anticipate a recession, those unrelated to housing activity and other household consumption do not expect it to have a significant impact on demand for their products and services,” the report said.

Most consumers also expect a recession in the next 12 months. The Bank of Canada has raised its policy rate by 300 basis points since March and money markets are betting another 50 basis points to 3.75% in its next decision on Oct. 10. 26.

(Reporting by Julie Gordon; Editing by Ismail Shakil;; 1-343-961-4020)

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