2023-09-19 13:41:15
The Bank of Canada’s fight to bring inflation back to a range of 1 to 3% is no easy ride. For a second consecutive month, inflation accelerated in the country, rising to 4% in August compared to the same period a year ago. The index was 3.3% in July (New window) and 2.8% in June.
According to Statistics Canada, the acceleration in inflation observed in August is mainly attributable to a 0.8% year-over-year increase in gasoline prices. In July, gasoline prices fell 12.9% compared to the same period the previous year.
On a monthly basis, gasoline prices increased 4.6% and contributed to the year-over-year growth observed in August 2023. The month-over-month increase was mainly attributable to the rise in crude oil prices, following the reduction in production in the main oil-producing countries, explains the federal agency in its latest report on inflation.
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In addition to energy, rent prices and the cost of mortgage interest continued to rise in Canada last month following a tenth increase in July in the Bank of Canada’s key rate, which is trying to slow overheating of the economy by increasing the cost of credit.
The sharp increase in recent months in mortgage interest rates continued in August as the mortgage interest cost index, which was +30.6% in July, rose to +30.9%. last month.
A five-year fixed rate closed mortgage currently costs around 6.84% interest. This represents monthly payments of more than $2,800 for a loan of $400,000 amortized over 25 years. Remember that the average value of homes in Canada is more than $686,000.
Rents also increased in August by 6% on an annual basis while this increase was 5.1% in July.
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Rent prices increased by 6% in August on an annual basis.
Photo : Radio-Canada
The acceleration in the pace of growth in housing prices was mainly attributable to the rental price index, which posted a 6.5% year-over-year increase nationally after recording an increase of 5.5% in July, specifies Statistics Canada.
The increase in rent prices also accelerated in eight provinces last month compared to July. The largest increases were observed in Newfoundland and Labrador (+8.4%), Alberta (+6.5%), Nova Scotia (+9.5%) and Manitoba (+ 6.1%).
Only Prince Edward Island and New Brunswick experienced smaller increases than in July.
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A little respite from the grocery store
In terms of good news, note a slowdown last month in the growth in the price of groceries which increased by 6.9% in August on an annual basis while the increase in the price of products purchased in store was by 8.5% in July. On a monthly basis, prices in grocery stores fell 0.4% in August.
Increase in food prices compared to August 2022
Fresh fruit +0.2%Grain products +9.8%Fresh or frozen chicken +8.9%Fresh or frozen beef +11.9%Coffee and tea +9%Sugar and confectionery +10.9%
The price of organized tours also fell by 6.4% in August, compared to July, while air transport did the same with a decline of 6.9%.
Provinces and territories
Inflation, on an annual basis, was highest in Nova Scotia in August (+4.7%), followed by Quebec (+4.6%), Yukon (+4.6%). ), Saskatchewan (+4.4%) and Alberta (+4.3%).
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