THE DAVISVILLE & LEASIDE INSIDER

THE DAVISVILLE & LEASIDE INSIDER

Monday, September 20, 2010

Softer inflation figures support stimulus

Economists predict slight forecast miss.

Inflation numbers due Tuesday may spark another round of discussion on what the Bank of Canada should do next time it's required to make a call on interest rates.

Economists polled by Bloomberg have a median forecast for a year-to-year gain of 1.9 per cent in Statistics Canada's consumer price index for August, up from 1.8 per cent in July.

The core inflation rate, which strips out volatile items such as energy and some foods, is expected to be 1.6 per cent, unchanged from July.

At CIBC World Markets, the forecast is for headline inflation to have fallen to 1.7 per cent and the core rate to remain at 1.6 per cent.

This is chalked up to mild price movement in the areas of gasoline, food, vehicles and housing.

Mortgage interest costs are thought to have put some upward pressure on the inflation rate after recent interest-rate hikes from the Bank of Canada.

Source: Calgary Herald
By Derek Abma, Financial Post
September 20, 2010


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