1454 ET - National Bank Financial has revised upward its outlook for inflation in Canada, to a 2.5% average in 2026. But economists at the firm say the Bank of Canada needs to exhibit patience, and therefore hold off on potential interest-rate increases. Higher energy prices stemming from the Middle East conflict are lifting inflation higher. This will benefit national income through Canada's energy sector, NBF says, but that won't be enough to offset weakness in manufacturing and retail. Higher gas prices will exert a drag on consumer spending, the firm says, adding the housing-market downturn is leading to a negative wealth effect. For those reasons, NBF says the BOC should hold its benchmark rate steady. It adds inflation -- excluding food and energy -- remains generally under control. (paul.vieira@wsj.com; @paulvieira)

(END) Dow Jones Newswires

April 22, 2026 14:54 ET (18:54 GMT)

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