How and why all the Bank of Canada forecasts changed in the latest MPR

The Bank of Canada’s April MPR nudged near-term growth slightly higher but raised the inflation profile mainly due to higher oil assumptions. Annual CPI in 2026 is now 2.3% (up 0.3ppt from January), with the quarterly path showing inflation above target through 2026 (Q4 2026 at 2.2% vs 1.9% previously). Core inflation is a touch lower near-term but a bit higher by end-2027. The Bank assumes Brent at US$75 by mid-2027 (vs US$60 in January), while spot Brent trades around US$116.80 — the oil shock is the principal driver. Tariff/legal changes and a small upward revision to potential output (and an assumed 0.2pp AI productivity boost) are modestly supportive of growth. Market impact: higher energy-driven inflation and a delayed disinflation path tighten the policy backdrop, reducing scope for early BOC cuts and supporting CAD resilience versus the USD (relevant to USDCAD).