Canada’s August inflation jumps to 4%

OTTAWA—Canada’s Annual inflation rate in August rose to 4 percent from 3.3 percent in July on higher gasoline prices, data showed Tuesday, a sign the central bank may be forced to raise rates rates again after 10 walking tours since March last year.

Analysts consulted by Reuters had predicted that inflation would reach 3.8 percent. The consumer price index rose 0.4 per cent month-on-month in August, Statistics Canada said, compared to a forecast increase of 0.3 per cent. Two out of three core inflation The measures also increased.

The annual one rate, the highest since the 4.4 per cent reported in April, is double the Bank of Canada’s 2 per cent target. The main driver was a 0.8 percent year-on-year increase in gasoline prices, which had fallen 12.9 percent in the 12 months to July.

“We must avoid too sharp opinions that the bank is done with it rate walking tours and be more careful, follow the evidence,” said Derek Holt, vice-president of capital markets economics at Scotiabank. “I still think we should leave the door very open for further developments rate walking tours, plural.”

Holt highlighted gains in two of the Bank of Canada’s three key underlying measures inflation – The CPI median increased to 4.1 percent from 3.9 percent in July, while the CPI decreased from 3.6 percent to 3.9 percent.

Bank of Canada Deputy Governor Sharon Kozicki said in a speech after the data was released that “ups and downs of the magnitude we’ve seen in recent months are not that unusual,” which is why the central bank focused on measures of key figures. inflation.

“Underlying inflation is still well above the level that would be consistent with achieving our 2 percent CPI target inflation,” she said.

Money markets increased bets for a rate walking tour in October After the numbers, we see a 42 percent chance of an increase after the price numbers, compared to 23 percent before.

The Canadian the dollar was trading 0.6 percent higher at 1.34 against the greenback, or 74.63 U.S. cents, after hitting its strongest level since August 10 at 1.3383.

However, another inflation report and a whole host of other data appear before the Canadian The next central bank will meet on October 25 to set the key overnight rate.

“We still think there is a chance of one rate walking tour is low because we feel like the cycle has stopped,” said Jimmy Jean, chief economist at Desjardins Group. “The economy is slowing and unemployment rates appear to be getting high, so those are big things that matter.”

Shelter prices rose 6 percent in August, following a 5.1 percent increase in July, driven in part by rising rents and higher interest rates rateS.

Canadian Prime Minister Justin Trudeau’s government will unveil legislation Tuesday aimed at boosting rental housing construction amid a housing crisis.

The country’s five major supermarket chains agreed on Monday to help the government in its bid to stabilize rising prices, after a meeting with industry and finance ministers.

“There was evidence of that inflationPressure on supermarkets is easing,” said Andrew Grantham, senior economist at CIBC Capital Markets, as food prices rise. inflation in stores fell from 8.5 percent year-on-year a month earlier to 6.9 percent year-on-year in August.

Bank of Canada Governor Tiff Macklem, noting a rise in oil prices, predicted on September 7 that “the headlines inflation will rise in the short term before easing.”

The central bank retained its main daily interest rate rate on September 6 at 5 percent, noting that the economy had entered a period of weaker growth, but said it could raise borrowing costs again if inflationThe pressure continues.

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