Canadian business sentiment fell to its weakest level since the Covid recession of 2020, but inflation expectations of both firms and consumers remain high, Bank of Canada surveys show.

Business executives said economic activity has slowed across a broad range of indicators, according to the central bank’s first quarterly survey since it held interest rates steady at 5% in early September. Still, firms are planning to make larger and more frequent price increases than they did before the pandemic, even as they expect to slow hiring.