Canadian annual inflation rose by two per cent in July to hit the Bank of Canada’s ideal target for a second straight month. The latest consumer price index found higher costs, year-over-year, for auto insurance, mortgage interest and fresh vegetables. A real estate sold sign hangs in front of a west-end Toronto property Friday, Nov. 4, 2016. THE CANADIAN PRESS/Graeme Roy

Inflation hits Bank of Canada 2% target for second straight month

Prices showed strength in other areas, including an 18.9 per cent increase in the cost of fresh vegetables

Canadian annual inflation came in at two per cent in July to hit the Bank of Canada’s ideal target for a second straight month.

Compared with a year earlier, consumers paid less last month for gasoline, internet services and traveller accommodation, Statistics Canada said Wednesday.

Prices showed strength in other areas, including an 18.9 per cent increase in the cost of fresh vegetables compared to the previous year. The consumer price index also found higher costs, year-over-year, for auto insurance, mortgage interest and passenger vehicles.

The average of Canada’s three gauges for core inflation, which are considered better measures of underlying price pressures by excluding volatile items, was also close to the central bank’s target at 2.03 per cent. It was up slightly from a revised reading of two per cent in June.

On their own, the headline and core numbers don’t put immediate pressure on the inflation-targeting Bank of Canada to adjust interest rates. The central bank can move the interest rate as a tool to try and promote or cool off inflation.

READ MORE: Lower gas prices slow annual inflation rate to Bank of Canada’s 2% bull’s-eye

But with weakening global economic conditions related to the U.S.-China trade war some economists now expect governor Stephen Poloz to cut interest rates this fall — and perhaps as early as September.

The Canadian economy has continued to perform well despite mounting concerns about the global outlook.

A closer look at the inflation data for July, shows gas prices had less of a year-over-year fall than the previous month’s report. The smaller drop applied more upward pressure on the headline number as consumers paid more for gas in July compared with June.

By omitting pump prices, the agency said last month’s overall annual inflation number was 2.4 per cent.

Prices, the report said, increased in all eight of its major categories compared with a year earlier. However, annual price pressures in the services index slowed last month to 2.4 per cent, down from 2.8 per cent.

By region, consumer prices slowed the most in Manitoba and British Columbia, the report said. Statistics Canada attributed the deceleration in Manitoba to the July 1 drop in the province’s retail sales tax.

On a month-to-month basis, the agency said consumers paid 2.5 per cent less for telephone services in July compared with June. The drop followed pricing changes across the industry as wireless companies faced tougher competition.

The agency said the decrease in phone plan costs was offset somewhat by higher price tags on devices like smartphones and tablets. From June to July, the price of these devices rose 42.5 per cent.

Andy Blatchford, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Comments are closed

Just Posted

QUIZ: A celebration of dogs

These are the dog days of summer. How much do you know about dogs?

Pilot project aims to boost entrepreneurial women in the Okanagan

W Venture, a collaborative project, is open for applications until the end of July

Cyclist struck by vehicle in West Kelowna

The cyclist was transported to hospital by ambulance

Police searching for missing Lake Country man

David Anthony Jenken, 65, was reported missing Friday and was last seen on June 28

VIDEO: Musqueam Chief captures captivating footage of bald eagle catching meal

‘This is why we have chosen to live here since time immemorial,’ Chief Wayne Sparrow’s nephew says

Police ramp up efforts to get impaired drivers off B.C. roads this summer

July is dedicated to the Summer CounterAttack Impaired Driving Campaign

Migrant workers stage multi-city action for full status amid COVID-19 risks

‘COVID-19 has exacerbated an existing crisis’

Shuswap resident spots waterspout near Salmon Arm

The rare weather event was spotted early in the morning on July 4.

PHOTOS: B.C.’s top doc picks up personalized Fluevog shoes, tours mural exhibition

Murals of Gratitude exhibit includes at least one portrait of Henry alongside paintings of health-care workers

Okanagan school drops ‘Rebels’ sports team name, citing links with U.S. Civil War

Name and formerly-used images “fly in the face” of the district’s human rights policy, says board chair

Seymour Arm landslide interrupts drinking water to 500 people

The July 3 slide damaged a water system and a logging road.

In troubled times: Independence Day in a land of confusion

Buffeted by invisible forces and just plain worn out, the United States of America celebrates its 244th birthday

Stop enforcing sex work laws during COVID-19, advocates say

There are provisions in Canada’s prostitution laws that make workers immune from prosecution, but not from arrest

Most Read