Rising inflation still a threat to economy, Bank says

The Consumer Price Index rose 4% year over year in August, Statistics Canada reported this week. That’s up from a 3.3% increase in July.

“In addition to facing higher energy prices, Canadians paid more for rent and mortgage interest in August,” Statistics Canada said. “Moderating the all-items CPI were declines in prices for travel-related services and a smaller increase in food prices compared with the previous month.”

The rise in inflation could impact the Bank of Canada’s next interest rate decision. In a summary of deliberations, released today, the Bank noted that they had concerns about pausing rate increases last month. The Bank said it needs to make sure Canadians aren’t expecting interest rates to be lowered soon, and that there is still a risk of ongoing high inflation.