Inflation Rate Rose in July

By Elli Davis, August 26, 2010

Photo by Daniel Hsia

The annual inflation rate, in Canada, increased again in July, Statistics Canada announced earlier this week. Its pace was actually the fastest one since April with the consumer price index increasing by 1.8 percent since July 2009. Electricity prices have been increasing the most during the year. 

Surprisingly, though, the core inflation rate which excludes the eight volatile items and changes to indirect taxes, decelerated slightly last month. It slowed down from 1.7 percent to 1.6 percent. Back to the biggest rise; electricity prices were 9.8 percent up from a year ago, followed by homeowner replacement costs with a 5.5 percent increase. Gasoline prices rose by 4.8 percent over the year. On the opposite side, mortgage interest costs fell, as well as items such as air transport.

I have mixed feeling from this, more on the positive side than the negative, though. After introducing harmonized sales taxes in Ontario and British Columbia, the results we saw could have been predicted. We should be pleased that the core rate slowed down.

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