Citi's Clark says inflation cements her outlier call for June rate hike in Canada

The only economist in a Bloomberg survey who’s forecasting an interest-rate hike at the Bank of Canada’s next meeting is confident the latest inflation data prove she’s right.

Even before Tuesday’s unexpected acceleration in headline inflation, Citigroup Inc.’s Veronica Clark had been predicting the central bank would raise borrowing costs by 25 basis points on June 7. Tuesday’s consumer price figures have cemented her call — and she’s surprised other economists have yet to change their forecasts. 

“The Bank of Canada is literally saying we’re waiting to see if we’ve done enough, and none of the data is telling you that you’ve done enough. I’m trusting what they say,” Clark said in a phone interview. “It’s been hard for markets to imagine another hike in Canada. But the Bank of Canada is first and foremost an inflation-targeting central bank, and inflation looks sticky, strong and much higher than 2 per cent.”