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MNI DATA BRIEF: Canada CPI Slows, But Still Above BOC Target

Canada's June CPI 3.1% vs May 3.6%, Expected 3.2%

MNI (Ottawa)
(MNI) Ottawa

Canada's inflation rate slowed to 3.1% in June from 3.6% in May as the lift from comparisons to last year's pandemic-induced price reductions faded, though leaving gains above the central bank's target range for a third month.

The CPI gained 0.3% on a monthly basis. Economists predicted prices to rise 0.5% on the month and 3.2% from a year earlier. The report is the first to reflect weightings based on spending patterns in 2020 during the pandemic, raising the profile of housing and curbing transportation, and a Statistics Canada official told MNI the changed weights had no impact on the year-over-year inflation rate.

The BOC raised its inflation forecasts earlier this month and affirmed guidance for a rate increase in the second half of next year when CPI stabilizes around its 2% target. The Bank of Canada expects CPI to average 3.4% in Q2, 3.9% in Q3 and 3.5% in Q4.

Source: StatsCan

MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com
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