OTTAWA — Economists are forecasting inflation reaccelerated to around four per cent last month, reversing previous progress made as gasoline prices push inflation higher. Statistics Canada's August consumer price index report set to be released Tuesday is expected to show the annual inflation rate rose for a second month in a row. Canada's inflation rate tumbled to 2.8 per cent in June, entering the Bank of Canada's target range of one to three per cent for the first time since March 2021. The c
OTTAWA — Economists are forecasting inflation reaccelerated to around four per cent last month, reversing previous progress made as gasoline prices push inflation higher.
Desjardins' managing director and head of macro strategy Royce Mendes said he expects headline inflation to come in at four per cent for August, up from 3.3 per cent in July. Meanwhile, TD anticipates inflation rose to 3.8 per cent. Executive director of economics James Orlando said another factor likely contributing to higher inflation in August is the fact that inflation started to decline a year ago.
Earlier this month, the Bank of Canada opted to hold its key interest rate steady at five per cent after hiking rates at its two previous meetings. The decision was made after recently released data showed the economy contracted in the second quarter.There are other signs of softening in the Canadian economy as well: the labour market is not longer as tight as it was a year ago as job vacancies fall and the population grows.
Although progress on getting inflation down is showing sings of stalling, economists and the Bank of Canada expect that tighter economic conditions caused by higher interest rates will eventually lead to smaller price increases.
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