Easing inflation keeps door open for Bank of Canada rate cuts
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Canadian inflationary pressures continued to show signs of easing last month, keeping the Bank of Canada in rate cutting mode with another move expected early next month.
The consumer price index was up 2.5 per cent in July from a year earlier, the lowest year-over-year inflation rate since March 2021. That’s down from a pace of 2.7 per cent in June and and an average of 2.8 per cent so far in 2024.
The numbers will stoke confidence at the Bank of Canada that inflationary pressures have been brought under control, and that current high levels for interest rates are no longer needed.
The central bank, which has already lowered borrowing costs by half a percentage point this summer, is expected to move ahead with another quarter point cut at its next policy decision on Sept. 4.
