Canada: Inflation steps up in June
July 20, 2012
In June, consumer prices decreased a seasonally adjusted 0.2% over the previous month, which followed the 0.3% drop recorded in May. The monthly price fall mainly reflected a sharp drop in prices for transportation. In spite of the monthly decline, annual headline inflation rose from 1.2% in May to 1.5% in June, undershooting market expectations of a 1.7% increase. Currently, Canada's inflation remains within the Central Bank's target of 2.0% with a tolerance margin of +/- 1.0 percentage points. Meanwhile, annual average inflation inched down from 2.5% in May to 2.4%. Simultaneously, core inflation, which excludes volatile items such as gasoline and fresh food, rose from 1.8% in May to 2.0% in June. The Bank of Canada expects headline inflation to average 2.2% in 2012 and 2.0% in 2013.