22 March 2019

“The Canadians will not face the same growth of borrowing costs this year as in 2018. However, they will still have to make higher debt payments than in years past, when the rates were lower, so consumer spending will feel certain pressure”.

The main drivers of inflation growth were an 8.1% increase in mortgage interest costs and an annual 14.3% gain in the cost of fresh vegetables. In addition to it, the cost of passenger vehicle insurance also rose by 6.3%.

Gasoline prices fell by 11.9% from a year ago, while the overall energy prices were down by 5.7%.

The report says the average of the BoC’s three core inflation readings, which excludes gas from calculation, went down by 0.1% from January to 1.8%.

According to James Marple, a senior economist at TD Economics, the slight gain doesn’t change the entire picture of price growth which is at neutral state today.

He says the core inflation has remained below 2% since last August.

“Such a relative stability means there’s no need in changing the policy”, – Marple noted. “A slight decline of CPI will be one more proof that the central bank will keep the pause”.