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

Just Posted

‘An extra $220 every 90 days’: B.C. patients pay more dispensing fees due to prescription limits

Kelowna woman says it’s outrageous to charge for refills every 30 days

Federal NDP suggests universal benefit to streamline aid payments

Those who do not need money will repay at end of tax year

Show us your positive messages, gestures and actions

Pinecrest teachers send message to their school community

No more ferries will sail from Departure Bay, Mill Bay, Brentwood Bay during COVID-19 pandemic

B.C. Ferries announces major changes to sailing schedules for 60 days starting Saturday, April 4

‘Hold our line’: 29 new cases of COVID-19 announced in B.C.

Saturday’s number of new cases marks the lowest in weeks.

Campbell River community COVID-19 agencies, services and resources list

The list outlines status of social agencies in the community

Two inmates found positive for COVID-19 at federal prison in B.C.; other tests pending

15 staff self-isolating waiting results, refusal to work notice sent, says correctional officer

Critic, workers’ group ‘disappointed’ Trudeau chose Amazon to distribute PPE

Amazon Canada said in an email to The Canadian Press that it is working with Canada Post, Purolator

Full World COVID-19 update: National Guard collect ventilators in New York; Spain, Italy improve

Comprehensive coronavirus update with news from around the world.

Saanich mayor receives his foster bees through pollinator rental program

‘I feel like I’m an adoptive father,’ Fred Haynes says of his rented mason bee colony

Nanaimo’s Harmac mill works to fill doubled pulp order for medical masks and gowns

Mill’s president says extra cleaning in place and workers are social distancing

Two people fined after B.C. police spot online ads re-selling 5,000 surgical, N95 masks

Police confiscated the masks, being sold at inflated prices, and now working with Fraser Health

Most Read