What Canada’s latest inflation reading means for mortgages
“Good news this morning – inflation came out, it’s not dramatic,” he said. “Core inflation is still at 2%. I don’t think that the Bank of Canada should be hiking next week, and if they do hike, they can’t be too aggressive.”
CPA Canada chief economist David-Alexandre Brassard also sees the latest reading keeping rate hikes off the table this month. “For now, there is still no clear-cut reason for the Bank of Canada to move interest rates in either direction, as both risks [a weakening economy and rising inflation] are working against one another,” Brassard said.
And he hinted that a further dramatic spike in rates looks unlikely at this stage. “I think most of the increase that we’ve seen in interest rates is behind us,” he said. “And if we’re right, it sets the stage for a normalization going into next year.”
Inflation on the rise, but sluggish economy isn’t picking up
While inflation has been ticking upwards in recent months, the economy has remained sluggish – with some forecasts indicating a further slowdown could be in store.
The Canadian Federation of Independent Business (CFIB), which represents 103,000 small and medium-sized firms, said in its latest Main Street Quarterly report that it sees Canada’s overall GDP growth slowing again in the fourth quarter.
