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.
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.
Well, the BoC expectation is about 3% so looks like we’re still pretty close to the target. Not much to see here for now.
Jackpot for the vegetarian, cyclist and renter.
Wut.
Food still got .4% more expensive in July than it was in June.
Since last June, food is 7.8% more expensive.
The decline in the rate at which fruit prices are rising was due mostly to cheaper grapes and oranges.
This is still not good news.
Fruit is less expensive, though.
But not concerning as most foods are purchased on futures contracts, and you are still reeling in the record high prices seen last year. The farm gate price continues to tumble. There is inherit lag, but the grocer price will crash in six months to a year from now as those old contracts expire.
And the good news is that inflation is only 2.4%, excluding mortgage costs. That is comfortably in the target range. The only reason mortgage costs are going insane is because the BoC keeps raising interest rates; the easiest thing to correct.
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.
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.