December 2017 – Canadian inflation rate reaches 1.5% due to oil prices gains
Last month, Canada’s annual inflation rate was up slightly, although it turned out to be still lower than expected, as food prices decline offset the hikes in other categories.
According to Statistics Canada, the consumer price index rose by 1.5% in December on a year-over-year basis, following a 1.2% increase reported in November. Meanwhile, economists had predicted a 1.7% hike for the previous month.
Genworth follows CMHC in raising its mortgage insurance cost
Genworth Canada, the biggest private mortgage insurer in the country, decided to follow the example of CMHC and also raise its premium for mortgage insurances.
As you know, this Monday, CMHC increased its mortgage insurance premium reacting to the new federal rules requiring larger capital from the CMHC against their mortgages.
Today, if you want to buy a house and can’t provide a 20% down payment, you must pay for a mortgage insurance. Although a borrower pays for it, the beneficiary is the lender, who will get a coverage in case of a mortgage default.
The Bank of Canada keeps its key lending rate unchanged
The central bank decided to keep its key interest rate at 0.5% and provided a wide assessment of the economic risks connected with a Trump victory.
The Bank of Canada kept its lending rate unchanged pointing to improving Canadian economy. In the same time, it warned about a dangerous uncertainty coming from possible policy changes by the U.S. – our main trading partner.
It’s the first official forecast and deep economic assessment given by the Bank after Donald Trump won the U.S. presidential election. The inauguration will be held on Friday.
So far, the BoC provides quite an optimistic outlook, mainly following its October growth forecasts of 2.1% in 2017 and 2018.