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• BOC SAYS EXPORTERS LESS PESSIMISTIC ABOUT THE HIT FROM TARIFFS
• BOC: PERCENTAGE OF FIRMS SEEING +3% CPI OVER 2Y STEADY AT 23%
• BOC SAYS % OF FIRMS SEEING 2-3% INFLATION UP TO 51% FROM 44%
• CONSUMER VIEW OF CPI IN 1 YEAR LITTLE CHANGED AT 4%
• BOC NEW CONSUMER SENTIMENT INDEX FELL FOR A 2ND QTR ON TARIFFS
• BOC: TWO-THIRDS OF CONSUMERS, 28% OF FIRMS EXPECT RECESSION

• Firm's outlooks less dire in Q2 with BOC polls showing most executives see the worst-case scenarios as less likely to occur given few companies have been directly impacted by tariffs. 
• Business inflation survey showed 23% of executives expected CPI to be above 3% over the next two years, matching last quarter's levels. Those who expected inflation to be between 2% and 3% rose to Q4 2024 levels at 51% from 44% last quarter.  
• Recession expectations among businesses declined to 28% in Q2 from 32% last quarter but still above 2024 levels. BOC poll also showed about two-thirds of consumers expect a recession over the next 12 months. 
• BOC business survey showed average expected wage increase is back to pre-pandemic levels as weak demand adds downward pressure.
• BOC unveiled new consumer sentiment index, the Canadian Survey of Consumer Expectations (CSCE) Indicator. The index fell for two straight quarters to -1.07 in Q2 2025 from -0.74 in Q1 and -0.36 in Q4 2024. 
• Consumer inflation expectations for the coming year were little changed at about 4%. 
• Surveys were taken before latest U.S. threat to boost tariffs to 35% on Aug. 1. 

Speaking to the House of Commons Liaison Committee, PM Sir Keir Starmer says that the gov'ts fiscal rules are "iron clad", adding that it is "important to have the [fiscal] headroom we had in the Spring Statement". A live stream of the committee hearing can be found here. 

• Following the gov'ts backing down to Labour rebels on proposed welfare reforms, speculation is mounting over how Chancellor of the Exchequer Rachel Reeves will maintain her fiscal rules (as Starmer has reiterated today), protect her fiscal headroom, and not breach manifesto commitments not to rais income tax, VAT or employee National Insurance contributions.
• Some on the left of the Labour party have advocated for a 'wealth tax', but The Times reports a Cabinet minister calling the idea a “non-starter”. The Times: “Wealth taxes don’t work,” one cabinet minister said. “Just look at what’s happened in other countries that have introduced them. They just don’t raise money, certainly not the kind of money that we’re looking for.” Another cabinet minister said a wealth tax was “off the table”. They said: “Wealthy people are mobile, they can move their assets to other more favourable jurisdictions.”