Canada’s inflation rate rose last month as Statistics Canada’s consumer index rose more than half a point to 1.9%, making this the largest increase seen in more than a year.
The entire inflation indicators rose in January and all provinces experiences inflations, with Atlantic Canada having the biggest gains.
The Bank of Canada core index, which the central bank uses to gauge systematic inflation, rose to 2%. On a monthly basis, prices gained 0.3% from December to January after dropping the same amount the previous month.
The annual inflation rate has gone from minus 0.9% to a positive 1.9% in 4 months.
Economists who expected the inflation rate would rise in January have said that the Bank of Canada governor Mark Carney is unlikely to read the sharp increase as an underlying trend that would cause him to raise interest rates before July.
In the current low interest rate environment, the amount Canadians pay on interest on their home mortgages remain a major source of disinflation, falling 5.5% in January.
With new mortgage rules expected to take effect as of April 19th, we have to realize that purchasing a home will become harder for home buyers.
Although there was a rise in inflation, it is not expected that we see interest rates increase earlier than anticipated, but if we see similar results in the new few months, then it could possible happen.
Glen Chapman
Broker of Record with Club “100″ GMAC Real Estate
www.club100realestate.com
