Is High Inflation on its way?

The posted interest rates on five-year mortgages jumped more than a third of a percentage point to 7.2 per cent at major Canadian banks this week.

Some think the extra government borrowing and a growing supply of money will sow the seeds for higher inflation and interest rates.

The cost for Washington and Ottawa to borrow for 10 years has spiked in the past two weeks - but is still well less than 4 per cent a year.

Recent official inflation rates have not been much lower.

The yield on Canada's inflation-adjusted bonds has jumped to 2.06 percentage points, more than the consumer price index, and up from about 1.5 points in August.

But that's down from more than 4 per cent just a decade ago.

Gina Burgio, Mortgage Agent

VERICO Designer Mortgages Inc.

Toll Free: 1-877-34-LOAN-5 or 1-877-345-6265

Fax: 1-877-345-6256

Email: gina@ginaburgio.com