Shopping at a supermarket in Toronto. In a note to clients, BMO economist Benjamin Reitzes said the Bank of Canada \u201cneeds to see at least a couple of months (and probably three) of decelerating inflation\u201d to consider more interest rate cuts. (Photo by Zou Zheng\/Xinhua via Getty Images) \u00b7 Xinhua News Agency via Getty Images <\/p>\n
Canada\u2019s 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.<\/p>\n
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.<\/p>\n
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 \u201cneeds to see at least a couple of months (and probably three) of decelerating inflation before further rate cuts are on the table.\u201d<\/p>\n