BCREA ECONOMICS NOW
Canadian consumer price inflation remained subdued in December with prices rising just 0.8 per cent, the same increase that was registered in November. The Bank of Canada’s core inflation index, which excludes the eight most volatile components of the CPI like energy and food, rose just 1.1 per cent year-over-year in December, a moderate deceleration from November. Inflation in BC registered only 0.4 per cent year-over-year.
Core inflation continues to trend well below the Bank of Canada’s two per cent target rate which suggests that the Canadian economy is still operating with a substantial amount of excess supply. Very low inflation no doubt contributed to the Bank’s easing of its rate tightening bias earlier this week, pushing a potential increase in interest rates from 2013 into 2014.
Copyright British Columbia Real Estate Association. Reprinted with permission.