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THE COST OF RISING INFLATION Everything costs more today than it did a year ago, but how much more you’re actually paying depends as much on where you live as what you buy.
Ok, per the above, we admittedly got sucked into another common refrain, this time the one about everything costing more today than it did a year ago. Clichés aside, the truth is, pretty much everything costs more every year; it’s just a matter of degree. Inflation itself isn’t a bad thing, or harmful; it’s actually desirable if it occurs at a moderate level and is stable, as it allows households to more ably allocate their spending and saving, and business to plan for the future. What’s been happening lately is not just that we have inflation here in Canada (and by the way, inflation is not just a Canadian thing—it’s a monetary stimulus/fiscal stimulus/supply chain/demand-driven thing that’s happened all around the world), but that prices are rising
at an uncomfortably high rate. Nationally, the most recent inflation rate is 5.7%, well above the Bank of Canada’s target of 1-3%. That said, inflation rates are not equal within the country, ranging from a high of 7.4% in Prince Edward Island to a low of 4.7% in both Saskatchewan and here in BC—below the national average, but still uncomfortably high. As alluded to in the previous section, the Bank of Canada will not stand idly by, having already raised its inflation-fighting interest rate by 25 basis points in March. With the goal of imparting on our currency the feature of store-of-value consistency, further interest rate increases are both expected and welcomed.
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