“The declines were largely the result of gasoline prices, which were 12.2% lower than 12 months ago”, TD Economics’ Brian DePratto said in a note to investors.
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Economists had expected an increase in the consumer price index of 1.4 per cent, up from 1.0 per cent in June, according to Thomson Reuters. “Many small firms are benefitting from the continued fall in oil prices and increased consumer spending”.
Annual inflation in Canada increased at a faster rate in July due to high costs for items than were imported like cars and food that offset the lower prices of gasoline and energy.
“The ONS state that ”a smaller fall in clothing prices on the month compared with a year ago was the main contributor to the rise in inflation”.
Clothing and footwear were up 1.3 percent.
However, a decrease in the price of food and non-alcoholic beverages prevented the UK’s inflation from rising any further. Prince Edward Island’s CPI fell on a year-on-year basis for the eighth consecutive month, reflecting the relatively larger weighting of energy products in the provincial index.
“It is not inconsistent with the view that we’re sort of through the worst of that (first half) contraction”.
Ferley said Canada’s central bank will likely hold the overnight rate at 0.5% for the rest of the year and into 2016.
The Financial institution of Canada’s core index, which excludes a number of the most risky gadgets, was up 2.four per cent from a yr in the past.
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“The Bank of Canada appears to be in a “sweet spot” presently, with the July interest rate cut providing the needed boost to the growth outlook”. Both results matched economist survey forecasts. The EconoTimes content received through this service is the intellectual property of EconoTimes or its third party suppliers.
