Bank of Canada governor defends interest rate deci

LONDON, Sept. 8: Bank of Canada Governor Macklem has defended the bank after critics say he has gone too far in raising interest rates as inflation, excluding mortgage interest costs, approaches 2 percent. McCallum said in a speech that mortgage interest costs are 30% higher than a year ago and are the single biggest impact on CPI. “Yes, mortgages would probably be cheaper today if we hadn’t raised interest rates, but inflation across the economy would be a bigger problem for everyone.” CPI after mortgages, for example, called for a freeze on rate hikes. Macklem responded that the Bank of Canada relies on the core CPI measure, which strips out price volatile items. One of the indicators, which strips out mortgage costs for 14 consecutive months, shows that the CPI is still running at 3.5%.