Canadian inflation, as measured by the Consumer Price Index (CPI), continued to trend lower in March as consumer prices rose just 1.6 per cent following a 2 per cent increase in February. The Bank of Canada's new core measure of inflation, called CPI-common which it says better tracks the underlying trend in prices, was up 1.3 per cent for the third consecutive month. In BC, provincial consumer price inflation was 2 per cent in the 12 months to March.
Trend measures of core consumer prices continue to show muted levels of inflation, suggesting that the economy is still operating well below capacity. However, the Canadian economy does appear to be heating up with strong economic and job growth. If that continues, then we could see a pick up in inflation by the end of the year. For now, moderate inflation means very little pressure on the Bank of Canada to act on interest rates.
Copyright British Columbia Real Estate Association. Reprinted with permission.