Inflation rate slows
OTTAWA—Canada’s annual inflation rate slowed to 1.1 percent in August amid smaller increases for housing and gas prices than in the previous month, Statistics Canada said today.
Bank of Montreal senior economist Benjamin Reitzes said inflation remains very tame, with no signs of a looming pick-up.
“There’s nothing here to push the Bank of Canada off the sidelines anytime soon.”
Bank of Canada governor Stephen Poloz was upbeat about prospects for the Canadian economy earlier this week, but noted it should be able to support some growth without stoking inflation as business investment picks up.
The central bank has maintained its key rate at one percent since September, 2010.
Capital Economics economist David Madani was far more bearish about his outlook for the economy.
Madani said he expects growth in the third quarter to fall well short of the Bank of Canada’s July forecast of 3.8 percent.
“With economic growth likely to remain sluggish through the rest of this year and inflation expectations well-anchored, it will be a long time before capacity or wage cost pressures ever threaten inflation above the bank’s one percent to three percent target range,” he noted.