Perhaps it’s time to change the tone of your cost of living conversations with clients.
Statistics Canada reported this morning the annual inflation rate slowed to 1.1% in August, compared to a 1.4% consumer price index hike in July.
The Bank of Canada’s core inflation index rose 1.3% for August compared with 1.4% in July. The results were in line with the expectations of economists.
The main contributor to inflation for the month was rising shelter and transportation costs, so if housing bubbles ever burst in Toronto and Vancouver, we could be talking about deflation down the line.
Canadians paid more for rent and natural gas, offset by lower mortgage interest costs. Meanwhile, the price of gasoline was also higher as well as the cost of vehicles.
For soon to retire clients who will soon stop driving to work, or with no plans to replace their cars, the cost of living picture is now different and may require some minor adjustments in how much to withdraw from RRIFs or other income funds.
It also creates an opportunity to tell younger clients about the need to take on some risk and look to equities, since returns for many fixed income instruments are bound to remain soft.
Read: UK inflation down