It remains to be seen what the long-term effects are, but inflation was slightly higher in July.
Figures released this morning by Statistics Canada show the unadjusted all-items Canadian Consumer Price Index rose 0.1% on a month-over-month basis in July, pushing the annual inflation rate up slightly to 1.3% from 1.2% in June and further above a recent low of 0.4% in April.
On a seasonally adjusted basis, consumer prices were up 0.2% from June in July, matching the pace of growth in each of the two prior months.
The agency also says much of the monthly increase in prices, on an unadjusted basis, in July reflected a 1.3% increase in gasoline prices and a 4.1% jump in travel services. Offset was provide by lower vehicle prices in the month although the 1.8% decline in July this year was similar to the 1.9% decline a year ago resulting in the year-over-year rate of growth for the component holding steady at plus-1.9%.
Experts at RBC Economics, like the Bank of Canada, "expect inflation to drift gradually higher in the near-term reflecting still-anchored inflation expectations around 2% as well as an expected pickup in economic growth that will gradually absorb remaining excess slack in the economy.
"With that said," the bank concludes, "progress is likely to be slow and we expect core price inflation to remain below 2% through 2014. We look for the Bank (of Canada) to raise the overnight rate in the second half of 2014 when the economy is closer to full capacity and both the headline and core inflation rates are approaching the 2% target."
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