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.
bank of Canada: “dammit! these plebes are not losing their jobs fast enough!”
It’s OK. It’s just food and gas and mortgage costs leading the way. Just stop… uh, buying those things? Shit.
I mean StatCan just removes those pesky volitile goods and that fixes inflation for them. Can’t the plebs do that too?
This is the best summary I could come up with:
Gas prices were a major factor pushing up the inflation rate, mostly due to what economists call the base effect.
Similar attempts at price controls in the 1970s had disastrous results, but some policy experts say it’s an idea worth exploring, at least on a limited basis.
“It’s not the '70s anymore, our markets are different,” said Vass Bednar, executive director of the Master of Public Policy Program at McMaster University in Hamilton.
While Bednar says she doesn’t advocate for a heavy-handed cap on all types of food in perpetuity, she says it makes sense to look into policies that could ensure some basic necessities — baby formula, bread, certain fruits and vegetables — have at least some options that remain affordable.
“If you’re feeding a baby formula and you’re on a fixed income, we need to have to have real conversations that are tough about whether and when to intervene in marketplaces to make sure items like that are accessible to people.”
Avery Shenfeld, an economist with CIBC, said he doesn’t see the justification for price caps in Canada’s grocery business, given the trends we’re seeing beneath the surface.
I’m a bot and I’m open source!
Money printer go brrrrrrrrrrrr
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.
Mortgage interest costs the biggest single factor in the increase
There was some relief in the produce section, with fresh fruit prices seeing their largest month-over-month decline since February 2008, down 6.5 per cent.
Gas prices were a major factor pushing up the inflation rate, mostly due to what economists call the base effect.
Jackpot for the vegetarian, cyclist and renter.
Jackpot
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.
