The chances of another interest rate cut are increasing.
The latest inflation data shows price increases are getting smaller in virtually every category that Statistics Canada measures. Yes, some prices are still rising but the increases are getting smaller, a sign the economy is slowing.
The next rate setting for the central bank is in early September. Virtually all observers expect the softening July inflation data will be enough to trigger another interest rate cut next month. And many believe there is room for two additional cuts before the end of the year.
That would reduce the central bank’s benchmark rate by 1.25 per cent since June and welcome relief for borrowers who hold variable or floating rate loans. It will also help ease concerns over drastic increases for those with mortgage renewals in the coming months.
Here in Saskatchewan, we continue to enjoy the lowest inflation rate in the country. It came in at 1.6 per cent in July, nearly a full point below the national rate of 2.5 per cent.
