Due to rising housing and transportation costs, the inflation rate reached 3.1%

Canada’s inflation rate in June was 3.1%, due to the rapid increase in housing and transportation prices, while the increase in food, clothing, and entertainment slowed down from May.

Statistics Canada reported on Wednesday that compared with June 2020, housing costs have increased by 4.4% in the past year, and transportation costs have increased by 5.6%.

But the inflation rate has been dragged down because the prices of many commodities have fallen compared to last year, including beef down by 11%, fresh vegetables (down by 7.5%) and mobile services (down-pop up by 21%).

The data agency said that the latter’s decline was “mainly due to various promotions across the industry that provide lower prices for mobile phone plans and reward data.”

The cost of housing is the main factor driving the rise in housing prices because the cost of buying or renting houses continues to increase.

The replacement cost of replacement house prices rose by 12.9%. Bank of Montreal economist Benjamin Reitzes pointed out in a report that this is the second fastest speed in 30 years and the fastest since 1987.

There may be “another wave of price pressure”

Although the cost of living in a place has increased, its financing costs have plummeted. Reitzes pointed out that mortgage interest costs have fallen by 8.7% in the past year, which is the largest drop since data has been preserved in more than 70 years.

At the same time, gasoline prices have risen by 32% in the past 12 months. But this is actually lower than 43% a month ago. Nevertheless, the pump price plays a huge role in the price.

If gasoline is excluded from these figures, the inflation rate is only 2.2%.

The 3.1% headline inflation rate is in line with economists’ expectations.

“As the reopening progresses, assuming [the delta variant] It won’t let us go backwards, we may see another wave of price pressure,” Reitzes said.

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