The central bank in Canada has been raising interest rates for more than a year now, trying to bring inflation under control. And this week we got what would appear to be a bit of good news on that front – the inflation rate or Consumer Price Index in September fell slightly compared to August.
However, while any news of a decline is generally welcomed, it is also not a signal that the end is in sight. In fact, the devil in the details might suggest we don’t actually have much to crow about just yet.
Contributors to the decline were gasoline – something not really moving in Saskatchewan – and food which should be expected as September is harvest season in these parts and large supplies of fresh product should push prices down.
And lastly, while Canada’s national economy slowing, we are not seeing similar pressure in the US. We are expecting zero growth in Q3 and Q4.
America is looking at four per cent expansion which will likely mean more rate hikes south of the border followed by a higher US dollar just in time for us to buy American produce again.
