Inflationary pressures continue to push up mortgage costs and other consumer goods such as fresh vegetables and new automobiles, per the latest readings by Statistics Canada.
The agency noted that excluding gasoline, the inflation rate rose 2.3% annually in April. StatsCan added that the average of its three gauges for core inflation (which also does not include gasoline) slowed slightly from 2% in March to 1.9% in April.
Earlier this quarter, StatsCan reported that Canadians paid 8.1% more on mortgage borrowing costs in March compared to the same time last year.
The consumer price index went up by 2% year-over-year in April, up from the 1.9% observed in March and 1.5% in February. This increase brought the index in line with the Bank of Canada’s ideal range of 2%.
Market observers noted that bank governor Stephen Poloz will thus be less likely to feel pressure to move the trend-setting interest rate in either direction.
“It just reinforces the notion that the Bank of Canada is in a wait-and-see mode,” according to Alicia Macdonald, principal economist with The Conference Board of Canada.
Poloz previously assured that the economy would be significantly more vigorous by the second half of 2019, saying that the steady growth at the beginning of the year is a considerable boost to the nation’s fundamentals.
“There are challenges in the Canadian and global economies that we need to manage, but there are clear signs that Canada is adjusting to the challenges,” Poloz explained. “Recent economic data have been generally consistent with our expectation that the period of below-potential growth will prove to be temporary.”