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

New family doctor in Keremeos

Dr. David Van de Vosse says practicing rural medicine is multifacted

Penticton woman sends fight to reduce preventable medical errors to Victoria

Teri McGrath and senior’s centre members presented 150-plus signature petition to local MLA

Penticton’s Dream Café hosting the Kliffs unique music blend

The Canadian, Berlin-based duo of Mark Bérubé and Kristina Koropecki, AKAthe Kliffs,… Continue reading

40th Annual Share-a-Smile Telethon this weekend

The OSNS’s annual fundraiser returns to Cherry Lane Nov. 17 from noon until 5 p.m.

Penticton’s OSNS benefits from $10,000 RBC grant

The OSNS Child and Youth Development Centre will use the money for tech upgrades

Gym enthusiasts invited to get in gear for kids

Spin4Kids Saturday at GoodLife Fitness

B.C. government working with RCMP to address $10 million in budget cuts

Public Safety Minister Mike Farnworth issues statement following report of RCMP cost-cutting

‘City that protects rapists’: Sexual assault survivor slams Kelowna mayor for defending RCMP

Heather Friesen spent the morning handing out flyers around city hall calling out the mayor

Malakwa woman still in the running for winning American baking show

Janet Letendre is the only Canadian competing on the Holiday Baking Championship

BC Liquor Stores to move fully to paper bags by March

Vancouver Island to be the first to convert to paper bags in November

New Okanagan resident building skills and community

The Respect Works Here November Multicultural Community Champion

Business savy volunteers sought in North Okanagan

Community Futures looking for members to join advisory panel, board and loans committee

SilverStar to open Nordic trails Saturday in North Okanagan

25 km of groomed trails are ready to explore by cross-country skiers

Salmon Arm businesses tipped off to Black Press advantage

Black Press Media hosts day of presentations for local business representatives

Most Read