Canada inflation eases in June, opening door to rate cut next week
UNSPLASH/Krzysztof Hepner
Consumer prices continue to cool in Canada, the country’s statistics agency reported Tuesday.
Canadian inflationary pressures continued to show signs of softening last month, opening the door for the Bank of Canada to cut interest rates for a second time at a policy meeting next week.
Statistics Canada reported inflation — on a year-over-year basis — fell to 2.7 per cent in June, from 2.9 per cent in May. That matches the lowest rate recorded over the past three years. Inflation has come in below three per cent in every month of 2024, after averaging 3.9 per cent last year.
Underlying price pressure readings that are closely monitored by the Bank of Canada are also showing readings of below 3 per cent.
The data gives the central bank scope to move ahead with a second rate cut in as many months at its July 24 policy decision. While inflation remains above the central bank’s 2 per cent target, interest rates are currently at levels that are considered extremely restrictive and are acting as a major drag on the nation’s economy.
Economic data in recent weeks have shown considerable economic weakness, including a report earlier this month that showed the jobless rate rising to the highest in more than two years.
