Majority of Canadians believe central bank rate hikes will fuel a recession: poll

It appears the majority of Canadians believe the country is on its way to a recession and many of them think the central bank’s rate hikes will fuel one.

That’s according to a new Yahoo Canada/Maru Public Opinion survey released on Tuesday.

In the survey’s key findings, it’s describing a recession as a six-month decline in economic activity — caused by consumers halting their spending, with a ripple effect of a drop in sales, businesses having to cut costs and lowering prices, pausing investments, and laying employees off.

The survey found 68 per cent of Canadians believe the country is on its way to a recession, while 17 per cent say they think we’re already in one, and 15 per cent believe neither are happening, that concerns are exaggerated.

The rise in central bank interest rates will fuel the recession, say 56 per cent of those polled, where 44 per cent of Canadians believe the hike will cool the inflation rate and avoid a recession.

In the past several weeks, the country has seen rising costs of groceries and gasoline, to name a few, with a little more than half of Canadians saying they are reducing spending and setting stricter priorities in the last month. 44 per cent indicated their spending habits haven’t changed.

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For the Canadians looking to avoid dipping into their wallets, the survey found food is at the top of the reduction list at 63 per cent, which includes grocery stores and restaurants. On that list, food was followed by entertainment, clothing and footwear, gasoline/petrol, vehicle use, and recreation, education and reading, with shelter at the bottom of the list at six per cent.

Survey participants were asked to compare what they paid for items in the last month to the price tag a month prior, and they said food and gas were the top two costlier items. Energy came in third place, followed by health and personal care, and other household goods and services. Home entertainment and air transportation were last on that list of 15 items.

The survey asked if Canadians are worried that inflation is causing them serious money issues and 56 per cent said they are worried inflation will trigger severe monetary issues, and 13 per cent say they’re panicked.

With that said, 66 per cent of Canadians surveyed say now is not a good time to invest in the stock market and it would be a better idea to invest money somewhere else, while 34 per cent, seeing a possible bargain, disagree and say now is a good time to invest in the market.

This survey was conducted on June 17, 18, and 19 of this year, and involved 1,515 Canadian adults randomly selected who are Maru Voice Canada panelists. The poll has a margin of error of +/- 2.5 per cent, 19 times out of 20.