Canada's annual inflation rate increased to 1.8% for July, boosted by the HST, after a 1% rise in June.
Prices were affected by introduction of the harmonized sales tax in Ontario and British Columbia, and a two-percentage-point increase in Nova Scotia's HST, Statistics Canada said Friday.
In Ontario, consumer prices were up 2.9% from a year earlier after June's 1.6% increase. Prices for gasoline, electricity, and passenger vehicle insurance premiums went up, and consumers also paid more for homeowner's replacement costs.
In B.C., consumer prices rose 2% for the 12-month period to July after a 0.5% increase in June. Consumers saw a 36.7% price increase in the cost of electricity, while restaurant prices increased 7.5%
However, the overall report was softer than economists had been forecasting. Expectations were for the annual inflation rate to come in between 2% and 2.1%.
The core rate of inflation -- which factors out several volatile components and consumption taxes such as the HST -- came in at 1.6%. That was down from 1.7% in June and below economists' forecasts, which ranged from 1.7% to 1.8%.
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