Is a recession on the way?

Dear Money Lady,

I am in my 70’s and remember when rates were 18%. I wondered if you think we are headed for a recession in 2023?


Dear Norm,

To answer you honestly – I’m not sure. Let me tell you why.

Currently no one knows for sure where inflation is headed or whether it will continue to be volatile. The three-month trend is averaging 5.8% so there is no denying that it is a force to be reckoned with in 2023. Basically, economists and analysts, have very little experience with true inflation other than what we witnessed in the late 70’s and early 80’s, when you witnessed interest rates at 18%. I will agree Norm, that Canadians should indeed brace themselves for continued instabilities in the markets for the beginning of next year; but it seems hard to predict which way inflation, rates and the financial markets will go in the latter part of 2023. There are many bullish and persuasive commentators that took the CPI results, (Consumer Price Index) as a positive sign that we had reached the peak; however, we are still experiencing continued price increases on services, food, and energy. With that being said, it generally takes 12-18 months for interest rate increases to fully impact the economy, so your question is on a lot of people’s minds: Are we headed for a recession? Maybe.

There is no doubt that we are in a market slow-down and will continue to be so in 2023 however the “R” word (recession) may not need to be considered as a true reality – as yet. Interest rate hikes definitely signal tougher economic times for everyone however historically we base recession trends on global markets. Oil prices, a typical inflation driver, peaked over $90 however now have receded below $80 which was below one year ago levels at one point for the first time in almost two years. Another thing to keep in mind is that the growth in Canada is doing well. Employment is up and the reports on wholesale and manufacturing was up 1.3%. The housing market on the other hand is not doing so well. We now see would-be home sellers holding onto their properties for more favourable future market conditions and the prospective buyers, plan to wait out the rising interest rates due to their continued reducing purchasing power. This high interest rate market of increased borrowing costs will most likely lead the continued phenomena of lukewarm buyers which in turn leads to unmotivated sellers and stagnant sales activity.

Now is the time to create a spending budget for next year, to eliminate consumer debt and try to save more. Remember, lifestyles absolutely cannot be supplemented by credit. Try to keep to your Christmas budget tight this year, track your expenses for 2023 and be more accountable to your financial goals. Of course, if any of my readers have questions about saving for the future or need specific advice about how to retire debt free and wealthy, you can always email me your questions on my website at:

Good Luck & Best Wishes,
ATML – Christine Ibbotson

Written by Christine Ibbotson, National Radio Host, YouTuber, and Author of 3 finance books plus the Canadian Best-Selling Book “How to Retire Debt Free & Wealthy” www.askthemoneylady.caor send a question to