Economics

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Bank of Canada to Review Inflation Framework Amid Tariff Concerns

The Bank of Canada is reviewing its monetary policy framework, but Governor Tiff Macklem suggests officials will likely reaffirm the 2% inflation target. The bank will consider a "richer" playbook for handling supply shocks and examine whether its core inflation gauges remain appropriate in a more volatile world. The bank may also pay more attention to the housing market in setting policy. A US-Canada tariff war would hurt the Canadian economy, with output plunging nearly 3% over two years.

Rachel Reeves faces painful spending cuts or higher taxes as economic forecasts downgraded

Chancellor Rachel Reeves faces pressure to cut spending or raise taxes due to over-optimistic growth and productivity forecasts, leaving her finely balanced Budget vulnerable to downgrades.