Canadian inflation, as measured by the Consumer Price Index (CPI), registered just 1.3 per cent in the 12 months to May. That is down from 1.6 per cent in April. The Bank of Canada's new core measure of inflation, called CPI-common, was also up 1.3 per cent for the fourth consecutive month. In BC, provincial consumer price inflation was 1.9 per cent in the 12 months to May.
Given the Bank of Canada's recent hawkish turn on monetary policy, the trend in inflation will be even more important in coming months. So far, there is little in the inflation numbers to justify an interest rate increase, though the very strong economic growth over the past year could put some upward pressure on prices soon.
Copyright British Columbia Real Estate Association. Reprinted with permission.