shelter. in addition, near - term inflation expectations and wage growth remain elevated, and corporate pricing behaviour is normalizing only slowly. 1 / 2 bis - central bankers'speeches the combined impact of all these pressures on inflation is that we now expect inflation to be about 3½ % through to about the middle of next year. as excess supply in the economy increases, inflation should ease in 2024 and reach 2 % in 2025. overall, inflationary risks have increased since july. the forecast we released last week has inflation on a higher path than we expected last summer. in addition, rising global tensions, particularly the war in israel and gaza, have increased the risk that energy prices could move higher and supply chains could be disrupted again, pushing inflation up around the world. with clearer evidence that monetary policy is working, my colleagues on the bank's governing council and i judged last week that we could be patient and hold the policy rate at 5 %. however, to be confident that our policy rate is high enough to get inflation back to 2 %, we need to see more easing in our measures of core inflation. we will continue to assess whether monetary policy is sufficiently restrictive to restore price stability, and we will monitor risks closely. our decision last week reflected our best efforts to balance the risks of over - and undertightening. we don't want to cool the economy more than necessary. but we don't want canadians to have to continue to live with elevated inflation either - and we cannot let high inflation become entrenched in the economy. if inflationary pressures persist, we are prepared to raise our policy rate further to restore price stability. in summary, we have made a lot of progress reducing inflation, but we are not there yet, and we need to stay the course. when price stability is restored, the economy will work better for everyone. with that summary, i would be pleased to take your questions and begin our discussion. 2 / 2 bis - central bankers'speeches

not tell us the absolute dollar amount of price gaps between the two countries. to assess the price - gap level, we use information about the prices of specific goods in both countries gathered from an informal internet survey conducted by bank of canada staff. we record the prices of a list of identical goods in canada and the united states at the same retail outlet. u. s. dollar prices are converted into canadian dollars using the bilateral exchange rate for that day. using these two sources of information, the bank of canada ’ s best estimate is that the canada - u. s. retail consumer - goods price differential was 11 per cent in september, down from 18 per cent in april. in other words, prices of a set of comparable goods in canada are an average of 11 per cent higher than the prices of these same goods in the united states. i caution that these are estimates and there is some uncertainty around them. an important question is why has the gap not narrowed more for similar goods, given the increase in the value of the canadian dollar. for your consideration, allow me to discuss bis central bankers ’ speeches some of the possible factors, both macroeconomic and structural, that influence the prices of goods and services in both countries. first, cyclical issues may be responsible for some differences between canadian and u. s. prices. unexpected economic weakness in one country could lead to an undesirable buildup of inventories and result in local discounting of prices. in addition, as long as markets are partially segmented across international borders, market power may enable firms to respond to local demand conditions — possibly resulting in lower prices in areas with weaker demand. secondly, from a macro perspective, prices take time to adjust. importantly, this is not only true in response to the exchange rate, but also to anything that changes the economic environment ( and this is why there are lags in the effect of monetary policy ). in addition to the macro elements, there are structural factors, including profit margins and underlying costs, that influence the prices of goods and services and that can also contribute to the gap in prices in canada and the united states. operating profit margins for both the wholesale and retail sectors will have an impact on the prices of consumer goods in retail outlets. one possible reason that margins have remained elevated in canada may be that the retail environment is more concentrated in canada than in the united states. in canada, the top four retailers have a 28 per cent market share, compared with only 12 per cent