Canada: Inflation inches up in July
August 23, 2013
In July, consumer prices increased a seasonally-adjusted 0.2% over the previous month, which matched the performance recorded in June. According to Statistics Canada, the monthly price increase mainly reflected higher prices for recreation and education, as well as for energy. Annual headline inflation inched up from 1.2% in June to 1.3% in July, which undershot market expectations of a 1.4% rise. Inflation is now at its highest level in more than a year, but remains below the Central Bank's target of 2.0% with a tolerance margin of plus/minus 1.0 percentage points. Meanwhile, annual average inflation remained stable at 1.0% in July. Core inflation, which excludes volatile items such as gasoline and fresh food, rose from 1.3% in June to 1.4% in July. According to its July Monetary Policy Report, the Bank of Canada expects headline inflation to average 1.0% in 2013 and 1.7% in 2014. FocusEconomics Consensus Forecast panellists expect inflation to average 1.4% in 2013, which is unchanged from the previous month's forecast. The panel expects inflation to average 1.9% in 2014.