Canada’s core inflation rate rose beyond the Bank of Canada’s expectations to 2.1% from 2%, however the central bank is unlikely to move up its target date for raising interest rates, noted a top economist.
As we have heard from the Bank of Canada, higher inflation could bring about the Bank to raise the trend setting rate faster than expected.
Douglas Porter, deputy chief economist with BMO Capital Markets noted that this number marks a number of months in a row where core interest rates have been running faster than the Bank of Canada expected.
Friday’s Statistics Canada reported indicated there is a 1.8% increase in consumer prices in Ontario, compared to a 1.6% increase across the country from February 2009 to February 2010.
It was noted by Porter that underlying inflation has been a bit higher than the Bank of Canada expected, and combined with a lot of strong data that ha recently been seen in Canada, it just increases the odds that the Bank of Canada will raise interest rates in the second half of the year as expected.
Buyers on the market should be wary that interest rates have the possibility of being raised earlier than anticipated, and act accordingly.
This does not mean that you be rash and purchase the next house you visit, but be aware that you are working within a time frame.
Glen Chapman
Broker of Record with Club “100″ GMAC Real Estate
www.club100realestate.com
