Dave Larock in Monday Interest Rate Update, Mortgages and Finance, Home Buying, Toronto Real Estate News Editor's Note: Dave's Monday Morning Interest Rate Update appears on Move Smartly weekly. Check back weekly for analysis that is always ahead of the pack.
Our inflation rates continue to rise more quickly than the Bank of Canada (BoC) and most market watchers have been forecasting. Last Friday, Statistics Canada released the latest Consumer Price Index (CPI) for May, and once again it showed average prices surging higher.
Overall inflation rose 2.3% in May, after rising to 2.0% in April, which marked the first time overall CPI had returned to the BoC’s inflation target since April 2012. BoC Governor Poloz had warned us that the April CPI data would be higher, but he attributed this rise to higher energy prices and predicted that they would prove transitory.
Energy prices once again led the charge in May, surging 8.4% on a year-over-year basis, but last month’s price rises were more broadly based. Core inflation, a more refined number that strips out more volatile CPI inputs like food and energy, also rose sharply from 1.4% to 1.7%.