the Wealthy Canadian

Stats Canada released the July Consumer Price Index report. Inflation is up moderately to 2.2%, with Western Canada still seeing the largest inflationary pressure.

“For the fourth straight month, owned accommodation costs were the main contributor to the year-over-year increase in the CPI.

The component that contributed the most to the increase of owned accommodation costs was mortgage interest cost, which rose 6.0%…

..In Saskatchewan, the 15.2% increase in the cost of owned accommodation was driven mainly by a leap in homeowners’ replacement cost (+37.7%), which surpassed the 31.8% climb in June.“

TD Economics produces an interesting look at economic performance and performs their own analysis. According to them, since inflation has being greater than the Bank of Canada’s target (of 2%) for a year now, the Bank is not likely to lower interest rates. Their guess is that rates will remain the same and possibly edge up on the next announcement.

Interesting, inflation has gone up due to home replacement costs and mortgage interest costs. If interest rates do go up it might cool the replacement cost, but increase the mortgage cost.

It looks like the TSX has been quite flat this week. (Note that I’m writing this before market close.)

Mark you calendars… Wednesday is the BoC interest rate announcement.

Update: According to the BBC, rumour has it that President Bush has a plan to assist homeowners who are in default on their mortgages.  They mention that Bush also wants to beef up enforcement so that there’s tighter control on the subprime lending… this all sounds very familiar to me.  There is also strong pressure on the Fed to lower rates.  We’ll have to wait and see if they succumb to the pressure.