Inflation on the decline
Posted Sep 21, 2010 7:12 am.
This article is more than 5 years old.
The national inflation rate slipped from 1.8 to 1.7 per cent in August, according to Statistics Canada.
Falling clothing and fuel costs are getting most of the credit for the decline, although the cost of some food items and car repairs are up.
Scotia Capital Economist Fred Ketchen tells 660News the drop isn’t that much of a surprise after a slight increase in July, the result of the harmonization of national and provincial sales taxes in Ontario and B.C.
Ketchen believes the drop will take pressure off the Bank of Canada to raise interest rates again to keep inflation in check.
Over the summer, the country’s key lending rate was boosted by 0.75 per cent to an even one per cent.
The core inflation rate is now running at 1.6 per cent, well below the two per cent threshold the Bank of Canada likes to maintain.
The Alberta and Calgary inflation numbers both posted big drops last month.
Provincially, inflation is running at 0.6 per cent, down from 1.5 per cent. Calgary’s inflation rate is now pegged at 0.5 percent, down from 1.4 per cent in July.
