The inflation rate in Canada eased in July, with the Consumer Price Index (CPI) registering an annual growth of 1.7 per cent, according to data released by Statistics Canada on Tuesday.
The agency said that lower gasoline prices, which were lower than last year due to the repeal of the federal consumer carbon tax, helped to ease inflationary pressures.
However, core CPI stood at 2.5 per cent, unchanged despite price increases in May and June.
Core measures of inflation, which are the Bank of Canada’s main focus, remained elevated, with CPI-median rising slightly to 3.1 per cent, while CPI-trim held steady at 3.0 per cent.
Financial industry experts expect inflation to ease slightly to 1.8 per cent, according to consensus estimates published by BMO Economics.
In a note on Friday, economist Benjamin Reitzes argued that the Bank of Canada needs to see at least two to three consecutive months of slowing inflation before any interest rate cut can be considered.
In June, the CPI rose to 1.9 percent from 1.7 percent in the previous month. The increase in the price of petrol and durable goods such as cars and furniture were among the main contributors to the increase.
