Canadian inflation registered 1.1 per cent in the twelve months to August, a slight deceleration from July's rate of 1.3 per cent. Core inflation, which strips out the most volatile components of the CPI, such as food and energy prices, increased 1.3 per cent in August. Consumer prices in BC actually fell 0.1 per cent in the 12 months to August largely as a result of the elimination of the HST.
Given that inflation continues to run well below the Bank of Canada's 2 per cent target, we expect very little urgency from the Bank of Canada in raising interest rates. Our expectation remains that the Bank will begin withdrawing monetary stimulus in late 2014 or early 2015.
Copyright BCREA - reprinted with permission
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