for the next several quarters before picking up in late 2024 and rising to 2½ % in 2025. as you know, we pay close attention to indicators of the balance between demand and supply in the economy, and these are now presenting a mixed picture. estimates of the 1 / 3 bis - central bankers'speeches output gap suggest the economy is now roughly in balance or even in slight excess supply. indicators of the labour market show it has eased considerably from overheated levels but still looks to be on the tight side. job vacancies have eased but remain higher than normal, and the unemployment rate has risen a bit but is still low. wage growth also remains elevated at 4 % to 5 %. what is clearer is that demand pressures have eased more quickly than we forecast in july. so what does that mean for inflation? we are already seeing more evidence that tighter monetary policy is reducing price pressures for many goods and services. and with the economy already or soon to be in excess supply, more downward pressure on inflation should be in the pipeline. but our outlook for near - term inflation is higher. let me explain. the effects of higher interest rates are most evident in the prices of durable goods, like furniture and appliances that people often buy on credit. and these effects have also spread to many semi - durables - a category that includes things like clothing and footwear - as well as many services excluding shelter. inflation in these categories is now running generally at or below 2 %. price increases for groceries, while still elevated at almost 6 %, have also eased and are expected to moderate further. despite this, we've revised up our outlook for inflation. higher energy prices, structural pressures in our housing market and stickiness in underlying inflation are all slowing the return to target. higher global oil prices have driven up gasoline prices, and we now expect oil prices to remain higher than we assumed in july. inflation in shelter prices is running above 6 %. part of this is due to higher mortgage interest costs following increases in our policy interest rate. but it also reflects higher rents and other housing costs, and these pressures are more related to the structural shortage of housing supply. finally, nearterm inflation expectations and wage growth remain elevated, and corporate pricing behaviour is normalizing only slowly. all this is making underlying inflation more persistent. the combined impact of all these factors is that we now expect inflation to be about 3½ % through to about the middle of next year. as excess

the transition for affected industries and households and to address concerns about how the cost of carbon pricing is distributed. carbon pricing is more effective if the same price is in place everywhere in the world, so that the steps to lower emissions can be at the lowest economic cost. further, a consistent global regime reduces incentives for high - emission activities to be relocated to another country rather than scaled back and encourages more effective long - range planning for carbon use. this is one reason why global agreements on climate change, such as the 2016 paris agreement, are so important. it has been pointed out, though, that even if there were no global agreement, it would be in the interest of a single country like canada to set a meaningful carbon price. emissions pose other health and environmental costs, even within canada, that would motivate a public policy response. 6 concerns that carbon pricing could result in a loss of canadian competitiveness can also be partly addressed through the use of the new revenue streams. for example, alberta ’ s carbon tax has been designed to help address competitiveness concerns in energy - intensive, tradeexposed industries. 7 financing the shift i ’ ve made the case that carbon pricing is a powerful tool for meeting climate change targets. so is green finance, which facilitates private - sector financial flows into environmentally sustainable investments. green finance works hand - in - hand with carbon pricing. with the right pricing on carbon, more green investments become profitable. however, enhanced transparency and analytical tools are also needed to enable investors to exploit those opportunities, particularly when the benefits may accrue over a long period of time. in this vein, growing numbers of investors — including some of you in this room — have signed on to the montreal carbon pledge for greater disclosure of climate - related risks. so why is transparency so important? those investors who choose to make environmentally responsible investments need clarity on the environmental impact of the activities they are financing. all investors need to know whether and how companies are exposed to any risks associated with climate change, including the impact of policy changes. for example, will the shift to a lowercarbon economy affect an oil company ’ s profitability, either through tax changes or reduced demand for oil? will certain oil reserves become uneconomic — aka “ stranded assets ”? 8 these questions are also important for regulators who assess whether vulnerabilities are 3 / 7 bis central bankers'speeches building in the financial system. physical, liability and policy - transition risks could result in the repricing