Canada Inflation Eases To 7.6% In July, But Analysts Eye Oversized Rate Hike.

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Canada’s inflation rate eased slightly in July, as lower gasoline prices outweighed fast-rising food prices; but economists said hot core measures suggest another outsized interest rate hike is still to come.

Canadian inflation slowed to 7.6% in July, matching analyst forecasts and down from 8.1% in June, Statistics Canada data showed. On a month-over-month basis, the index rose 0.1%, again matching forecasts.

“Canadian’s looking at today’s consumer price data will be breathing a sigh of relief,” said Royce Mendes, head of Macro Strategy at Desjardins Group, in a note. “But this is no time to get complacent.”

Mendes noted gasoline prices, up 35.6% in July versus 54.6% in June did much to blunt annual price acceleration, with food prices and demand-driven prices, such as flights and hotel rooms, still gaining speed.

Reuters.

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