There is further evidence that the Bank of Canada has probably erred in raising interest rates recently with the latest release by Statistics Canada of the CPI inflation index. As the report partly reproduced below courtesy of Stats Canada shows inflation over the 12 months to August fell to 1.7 % from 1.8 % in July.If we exclude energy prices the overall index was up only 1.4 %. since the Bank's target for inflation is 2 % there was no justifiable reason for raising interest rates.
Tuesday, September 21, 2010
Released at 7:00 a.m. Eastern time
Released at 7:00 a.m. Eastern time
August 2010 (Previous release)
Consumer prices rose 1.7% in the 12 months to August, following a 1.8% increase in July.
Overall, energy prices rose 5.0% between August 2009 and August 2010, following a 7.9% increase during the 12-month period to July. Excluding energy, the Consumer Price Index (CPI) was up 1.4% in August.
Within the energy price index, prices for electricity rose 7.7% in August compared with the same month a year earlier.
Higher consumer prices were also recorded in August for homeowner's replacement costs (+5.5%), passenger vehicle insurance premiums (+5.1%) and food purchased from restaurants (+2.5%).
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