As inflation jumps to 3.3 per cent in July, economists say uptick is bad news for BoC
CTV
Canada's annual inflation rate rose to 3.3 per cent in July, as economists warn the latest consumer price index report spells bad news for the Bank of Canada. The uptick in price growth comes after inflation tumbled to 2.8 per cent in June, falling within the Bank of Canada's target range.
Canada's annual inflation rate rose to 3.3 per cent in July, as economists warn the latest consumer price index report spells bad news for the Bank of Canada.
The uptick in price growth comes after inflation tumbled to 2.8 per cent in June, falling within the Bank of Canada's target range of between one and three per cent for the first time since March 2021.
"There's no sense sugar coating this one -- it is not a good report for the Bank of Canada," said BMO chief economist Douglas Porter in a note to clients.
Inflation ticked up last month because gasoline prices fell less dramatically on a year-over-year basis than they did in June, Statistics Canada said.
After a significant run-up in energy prices prompted by the Russian invasion of Ukraine, lower gasoline prices have largely driven the decline in inflation over the last year.
Now, other underlying price pressures need to ease for inflation to fall further. Porter notes gasoline prices are on pace to rise by five per cent in August.
The latest report has raised the odds of a rate hike next month, according to forecasters, despite other signs of economic softening, including rising unemployment.