Inflation eases more than expected in Canada
Canada’s headline inflation rate cooled for the second month in a row in August, running at an annualized pace of 7.0 per cent, lower than economist expectations of 7.3 per cent and down from July’s reading of 7.6 per cent.
The decline in the consumer price index was the largest since early in the COVID-19 pandemic, Statistics Canada said Tuesday.
Meat prices are up 6.5 per cent from last year, dairy, 7 per cent, baked goods, 15.4 per cent and fresh fruit is up 13.2 per cent.
All three core measures of inflation, which the Bank of Canada watches closely, eased slightly, but are still a long way from the Bank of Canada’s 2 per cent target.
“Even after today’s deceleration, the annual rate of inflation remains well above the Bank of Canada’s target and as such further interest rate hikes are still in the cards,” Andrew Grantham, senior economist at CIBC Capital Markets, wrote in a note after the data.
“However, a clearer gap appears to be opening up between Canadian and U.S. inflation trends, which should bring a lower peak from the Bank of Canada than the Federal Reserve.”
More to come…