How are mortgages keeping inflation high?
BNN Bloomberg
The Bank of Canada hiked interest rates again this week in response to persistently high inflation, prompting questions about the role of mortgages in the ongoing battle with high consumer prices.
Canada’s consumer price index (CPI) came in at 3.4 per cent in May, but some observers have pointed out that removing mortgages from the inflation picture would put the figure far closer to the central bank’s two per cent target.
Experts say that mortgages alone can’t be blamed for high inflation, but the situation speaks to the outsized role of real estate in Canada’s economy, and points to a tough battle ahead for the Bank of Canada and other policymakers looking to improve living costs.
WOULD INFLATION BE ON TARGET WITHOUT MORTGAGES?
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