25 march 2010
According to Statistics Canada, last month the core inflation rate reached the level of 2.1%. It’s 0.5% more than Mark Carney expected for the first half of this year. He expected the core inflation not to hit 2% until the second half of the year. This announcement made economists believe that it would be very difficult for him to keep overnight rates at 0.25%.
“The bank’s most important duty is price stability,” Carney said in his speech to the Ottawa Economics Association. He also admitted that core inflation was a little bit stronger than he predicted. “The most valuable contribution that monetary policy can make to economic stabilization is to provide Canadians with confidence in their money purchasing power.”
The last overnight rate rise was July 2007. Bank of Canada’s next date for the rate announcement is April 20, 2010.
IF YOU CURRENTLY HAVE VARIABLE RATE MORTGAGE AND FEEL UNCOMFORTABLE WITH INEVIDABLE RATE HIKE LATER THIS YEAR THAN IT’S A GOOD TIME TO CONVERT YOUR MORTGAGE INTO FIXED. FIXED RATES ARE STILL AT HISTORICALLY LOW LEVEL; HOWEVER WE EXPECT FIXED RATES TO RISE SOON.