Inflation rate edges up, interest rate announcement to come

Statistics Canada released its look at inflation in September on Monday, October 19, and the numbers showed an increase of 0.1 per cent nationally, moving the annual inflation rate to 3.1 per cent.

The Consumer Price Index looks at several different products that we all buy on a regular basis and compares price changes over time. It’s the primary way economists determine the rate of inflation across the country. The Bank of Canada also monitors this number and works to keep it around two per cent.

No surprise this time around. Skyrocketing energy prices took most of the blame for the increase, with gasoline prices surging 19 per cent year over year. Gasoline made up the biggest portion of that increase, jumping 27.8 per cent. Last month, gas prices were up 22.8 per cent.

Across the country, Statistics Canada also reported an increase in housing costs, edging up 1.8 per cent, an increase of three-tenths of a percentage point from the previous month. The same numbers showed rents were up 2.8 per cent nationwide.

There was some good news included in the report. The cost of groceries rose by 1.7 per cent in September, down from the 2.8 per cent increase seen in August.

Students and their parents are also paying more this year for post-secondary education. Nationally, tuition rose 2.4 per cent this year. Last September, that number was 1.7 per cent.

Maritimes Continue to Face Higher Inflation

The annual inflation rate recorded in September in Nova Scotia was 5.6 per cent, up half a percentage point from the previous month, and it continues to see one of the highest rates of inflation in the country. New Brunswick was close behind at five per cent, a 0.4 percentage point increase. Prince Edward Island topped the list of provinces at 5.7 per cent.

So, what does this mean for your mortgage?

The Bank of Canada is set to decide on its key overnight rate on Wednesday, October 28.

While inflation numbers were up, there were no large changes outside of the energy sector. Because of that, there is some indication in the financial community that Bank of Canada Governor Tiff Macklem may hold interest rates steady.

Published reports indicate that while the CPI continues its upward march, the latest increase may not provide enough reason for the Bank of Canada to raise rates again.

Take the uncertainty out of the equation

Why worry about rates?  Now is a perfect time to have a discussion with an unbiased mortgage professional.

If you have any questions about pre-approvals or about your mortgage, get in touch with us at the Clinton Wilkins Mortgage Team. You can give us a call at (902) 482-2770 or contact us here.