Canada’s inflation rate bucked its recent trend of slowing last month and instead rose at a 3.3 per cent annual pace in July.

  • SixOP
    link
    fedilink
    11 year ago

    Mortgage interest costs have increased by 30.6 per cent in the past year. That’s another record year-over-year gain, and the largest single factor in the increase in the overall inflation rate.

    To which, I am no economist, but I do wonder if pushing interest rates is having diminishing returns on solving the inflation issues. If it wasn’t the case that there is a housing shortage, I would think that the effects would be more substantive on lowering inflation, but that’s not the reality we face. People are in dire need of homes, and will just keep taking on debt to acquire them. The level at which this stops is when people start to foreclose. Which, while it would add housing stock, it also ruins a lot of lives.

    Again, this is not my expertise, but my impression is that interest rates are a bit of a blunt tool. (Though they might be the only tool the Bank of Canada has to use in this case.)

  • Cam
    link
    English
    01 year ago

    Money printer go brrrrrrrrrrrr