housing market. for the inflation target to be achieved on a sustained basis in 2016, the economy must reach and remain at full capacity. closing the output gap over this time frame is reliant on continued stimulative monetary policy and hinges critically on stronger exports and business investment. weighing these considerations within the bank ’ s risk - management framework, the monetary policy stance remains appropriate and the target for the overnight rate remains at 1 per cent. the bank is neutral with respect to the timing and direction of the next change to the policy rate, which will depend on how new information influences the outlook and assessment of risks. and now, with that, carolyn and i would be pleased to answer your questions. bis central bankers ’ speeches

grain and fertilizer. weather events in other parts of the world affected the supply of many crops. and disease restricted the supply of poultry and eggs. this perfect storm of factors was showing up in canadian grocery stores by the middle of last year. - 3the other main driver of high inflation around the world has been a combination of disruptions in global supply chains and a spike in demand for durable goods. like other people around the world, many canadians upgraded their homes during the pandemic with things like new furniture, appliances and technology. we couldn ’ t spend on services — like vacations and restaurants — so most of our spending, and the spending of many others around the world, was going to goods. meanwhile, lockdowns were wreaking havoc on highly integrated global supply chains. factories were shut down, raw materials were in short supply, and transportation backlogs piled up. the result was prices for a wide range of goods spiked. domestic demand these three global inflationary forces — a spike in commodity prices, a surge in global demand for goods and impaired supply chains — then ran into a fourth element : an overheating economy here in canada. early last year, around this time, we were coming out of the omicron wave of covid - 19 and what may turn out to be the final lockdown. the canadian economy had become increasingly resilient over the course of the pandemic, weathering each subsequent lockdown better than the last. canadians were anxious to catch up on the things they had missed, like travelling and eating out, so we saw some spending start to shift from goods back to services. and even though canadian businesses had shown remarkable resilience adapting to multiple lockdowns, many struggled to keep up with the surge in demand they faced. supply chain issues were still with us, and staff who had left or been laid off during the pandemic had to be rehired, re - trained or replaced. our survey of businesses in the first quarter of last year found that four out of five would have trouble meeting an unexpected boost in demand — a record high. 1 this pressure showed up very clearly in the labour market. the number of vacant jobs rose to nearly twice the pre - pandemic level, an obvious sign of widespread labour shortages. labour is an important input cost for businesses, particularly in the services sector. this shortage of available workers, combined with the surge in demand for services, put upward pressure