Canadian Inflation Cools But Hot Core Keeps Up Rate Pressure

Consumer price inflation cooled as gasoline prices fell by the most since the start of the pandemic, though underlying price pressures will likely push the Bank of Canada to continue delivering aggressive rate hikes, Bloomberg News reported. The consumer price index rose 7.6% in July from a year earlier, Statistics Canada reported Tuesday in Ottawa. The inflation gauge increased 0.1% from a month earlier, the seventh straight increase. Both numbers matched the median estimates in a Bloomberg survey of economists. While yearly inflation has possibly peaked, the persistently broad pressures could still prompt the central bank to deliver a 75-basis-point increase to its policy interest rate on Sept. 7. The average of core measures -- often seen as a better indicator of underlying price pressures -- climbed to 5.3%, a record in data dated back to 1990, from an upwardly revised 5.23% in June. Service inflation rose to 5.7%, and Statistics Canada said “upward pressure on prices remained broad-based.” Read more.