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.

Just Posted

B.C. dog breeder banned again after 46 dogs seized

The SPCA seized the animals from Terry Baker, 66, in February 2018

Williams Lake city councillor demands 39 affordable housing units for his city

New affordable housing project slated to open in December only has eight subsidized units

B.C. offers early retirement, training fund for forest workers

Communities eligible for $100,000 for permanent closures

New McLeese Lake Soul 2 Sole Trail Race raises close to $5,000 for McLeese Lake fire hall

One hundred and 34 runners and hikers took part in the inaugural race Sept. 15

CRIMESTOPPERS: Williams Lake RCMP seek public’s assistance

Williams Lake RCMP released three names of people they are looking for

VIDEO: Drone footage documents work to free salmon at Big Bar landslide

Video shows crews working to remove rocks and wood, and transporting salmon by helicopter

B.C. party bus company to be monitored after 40 intoxicated teens found onboard

Police received tip teens and young adults were drinking on party buses and limousines in Surrey

Rick Mercer calls out Conservative candidate in B.C. for fake meme

‘Not true. All fake. Please Stop,’ tweeted Rick Mercer in response

Bear killed in Kimberley after chasing girl, wreaking havoc on town

This particular brown-coloured bear has been the subject of many calls this summer; very food habituated, CO says

Police investigate after intoxicated teens clash with security at B.C. fair

18-year-old woman arrested and RCMP looking at possible assault in Victoria-area fall fair incident

BC SPCA investigating after three dogs found shot dead in Prince George ditch

The three adult dogs appeared to be well cared for before being found with gunshot wounds, BC SPCA says

Boy overdosed on illicit anti-anxiety drug found on Kelowna classroom floor, RCMP say

Noah Mills, 8, ingested a pink powdery substance off his Kelowna classroom floor

Psychiatric assessment ordered for man accused in Salmon Arm church shooting

Lawyer tells court accused was diagnosed with psychosis hours after his arrest

Surrey mom allegedly paid $400,000 for son in U.S. college bribery scam

Xiaoning Sui, 48, was arrested in Spain on Monday night

Most Read