The Canadian annual inflation rate came in at two per cent in July to hit the Bank of Canada’s ideal target for a second straight month.
Statistics Canada says consumers paid less last month for gasoline, internet services and traveller accommodation compared with a year earlier. However, the latest consumer price index showed higher costs, year-over-year, for auto insurance, mortgage interest and fresh vegetables.
READ MORE: Canada’s inflation rate falls to 2% in June thanks to gas price drop
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, up from a revised two per cent in June.
On their own, the readings don’t apply immediate pressure on the inflation-targeting Bank of Canada to adjust interest rates. But with weakening global economic conditions related to the U.S.-China trade war more economists now expect governor Stephen Poloz to cut interest rates this fall — perhaps as early as the September.
WATCH: The impact of the U.S.-China trade war on Canadians