Canada’s annual inflation rate edged down in August to 1.1 per cent from 1.3 per cent in July, as expected, ensuring there is no pressure on the central bank to raise interest rates any time soon.
Higher shelter costs, particularly rent and natural gas, were the main driver of inflation in the 12-month period, Statistics Canada said on Friday.
However, prices for most items rose at a slower annual pace in August than in July. Price growth accelerated only for food and for clothing and footwear, the agency said.
The consumer price index was flat on a monthly basis. Analysts in a Reuters poll had forecast a 0.1 per cent climb in the month and an annual rate of 1.1 per cent.
Core CPI, closely watched by the Bank of Canada, rose 0.2 per cent in August from July for an annual core rate of 1.3 per cent, matching expectations.
The inflation rate has stayed below the Bank of Canada’s 2 per cent target since May 2012. The bank has said it will keep its benchmark interest rate on hold at 1.0 per cent as long as inflation is muted, the economy has significant slack and household debt continues to improve.