Grocery prices increased by 8.5 per cent in the year up to July. That’s an easing from 9.1 per cent the previous month, but still three times the overall inflation rate.

  • blindsight@beehaw.org
    2·
    1 year ago

    idk about renters; the highway interest costs will eventually be passed on to them, probably.

    Agreed re: the target rate, especially as mortgage interest is directly affected by the rate hikes they use to control inflation. I would hope they’d strip interest rate increases from inflation when making a decision about raising interest rates.

    • EhForumUser
      21·
      1 year ago

      Exploding interest costs have been driving inflation for quite some time, which has been in the target range for several months when excluding interest costs, and has setup an interesting feedback loop.

      Debt shrinks in a high inflationary environment, thus making it more attractive to take on more debt; an increase in demand. The supply or loans can’t keep up with that demand, so rates (the price of debt) start to rise in kind to serve as a counterbalance to keep the supply and demand in equilibrium.

      But in this environment, higher rates are what is pushing inflation higher. The higher the interest rates, the higher inflation goes, so demand isn’t scared off by a higher price. 1980s-style 20% loans might be a scary looking enough number even if inflation follows to see some second guessing, but until then…

      Oh to be a fly on the wall at BoC offices right now.