Canadian prices, as measured by the Consumer Price Index (CPI), rose 8.1 per cent on a year-over-year basis in June, up from 7.7 per cent last month. This was the fastest growth rate since January 1983. Excluding gasoline, the CPI rose 6.5 per cent year over year in June. Month-over-month, on a seasonally-adjusted basis, prices were up 0.6 per cent, down from 1.1 per cent last month. In BC, consumer prices rose 7.9 per cent year-over-year, down from 8.1 per cent last month. Average hourly wages grew 5.2 per cent year-over-year in June, indicating a decline in purchasing power.
While June's CPI brought some encouraging early signs that inflation is peaking, we will need to see a sustained decline in the rate of inflation over the next several months to see any relief on mortgage rates. For now, markets are still expecting an aggressive Bank of Canada, singularly focused on bringing inflation back to its 2 per cent target.
For more information, please contact: Gino Pezzani.