Core inflation still remains elevated but is on a downward trend and the BoC remains focused on restoring price stability.
Weaker growth in Canada has led to a relief in price pressures.
Consumption growth continues to weaken as does the declining housing activity.
The impact of the BoC’s interest rate policy has slowed household credit growth and spending and the tight labour market has continued to gradually ease.
With the recent increase in gasoline prices and CPI, inflation is expected to be higher in the near term before easing again.
Core inflation is running at 3.5%, indicating there has been little recent downward momentum in underlying inflation.
The higher inflation persists, the greater the risk that elevated inflation becomes entrenched, making it more difficult for the BoC to restore price stability.
BoC remains concerned about the persistence of the underlying inflationary pressures and is prepared to increase the policy interest rate further, if required.
What does this mean for interest rates? The good news for variable rate mortgage holders is that there will, for now, be no further increase in mortgage payments. For the time being, there is no pressure on fixed interest rates to increase and the possibility of increased discounts to Prime for new variable rate mortgages might be on the horizon.
If you have a mortgage maturing or if you are needing to refinance or making a purchase please reach out to us so that we can advise you as to your best mortgage options.
The next scheduled date for announcing the overnight target rate is October 25, 2023.
Keith Baker | kpbaker@shaw.ca | 604.723.5363
Jackie Zerbe | jacqueline@totalmortgage.ca | 604.724.6982
(@TotalMortgage.ca)