Shopping at a supermarket in Toronto. In a note to clients, BMO economist Benjamin Reitzes said the Bank of Canada “needs to see at least a couple of months (and probably three) of decelerating inflation” to consider more interest rate cuts. (Photo by Zou Zheng/Xinhua via Getty Images) · Xinhua News Agency via Getty Images
Canada’s inflation rate slowed in July, with the Consumer Price Index (CPI) registering 1.7 per cent growth annually, according to Statistics Canada data released Tuesday. Gasoline prices, lower than last year because of the removal of the federal consumer carbon tax, helped push inflation down, the agency said.
CPI excluding gas prices was 2.5 per cent, even with price increases in May and June. Core inflation measures, to which the Bank of Canada pays particular attention, remained higher, with CPI-median inching up to 3.1 per cent and CPI-trim holding at 3.0 per cent. Economists have pointed to recent stickiness for core measures, which carve out the most volatile components to get a clearer view of underlying price pressures.
Financial industry experts had expected inflation to cool slightly to 1.8 per cent, according to consensus estimates published by BMO Economics. In a note last Friday, economist Benjamin Reitzes argued that the Bank of Canada “needs to see at least a couple of months (and probably three) of decelerating inflation before further rate cuts are on the table.”
In June, CPI increased to 1.9 per cent from 1.7 per cent the month before. Prices of gas and durable goods — such as cars and furniture — were factors in that increase.
This story will be updated.
John MacFarlane is a senior reporter at Yahoo Finance Canada. Follow him on X @jmacf.
Download the Yahoo Finance app, available for Apple and Android.