The low, low interest rate of 1% set during the uncertainty of recession times, September 2010 could soon be coming to an end according to the Bank of Canada. Consumers have been rushing headfirst to start borrowing at this rate since it was instituted, causing officials to repeatedly caution the public and the overall household debt of the nation to increase sharply. Now, due to the steady inflation of Canadian currency, interest rates are set to rise sharply, though some say not yet. The Financial Post claims that banks will keep up their “tough talk” but will not act on it for a while, citing the subtle rise in energy costs as evidence. Many economists suspect that interest rates will begin to rise ever so slowly by the end of this fiscal year. First time buyers and honeymooners be warned, the Canadian housing market is about to cool off. Financial post reports that, Newfoundland and Labrador had the highest inflation rate last month, at 3%. Nova Scotia and New Brunswick were also above the national average, both at 2.6%. The lowest rate was in Alberta, at 0.8%, falling costs for electricity and natural gas, while British Columbia had an annual increase of 1.6%.
During the last one year or so, the Canadian people have been burdened with the high inflation numbers that were forcing them to cough up more dollars of their hard earned income for their routine essential expenses. But those times are slowly changing for the better. The latest inflation numbers are much lower than what were expected. It is down to 1.2% which is at the lowest level in the last couple of years. What is the major reason for this? According to this news article the drop in inflation is the direct result of the reduction in gasoline prices. In fact, the current price of gasoline is at 2.3% lower than what it was at the same time a year ago. This is great news for struggling people in Canada who are trying hard to make both ends meet. How long can you expect to have such low gasoline prices to last? It is never an easy task to predict gas prices. It is almost as hard as predicting the weather in the country and can never be 100% certain about the results. For the time being, every Canadian person can enjoy the low gas prices and the associated low cost of living in the country.