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Canada’s consumer price index report for June showed overall inflation running at an annualized 2.4-per-cent rate, its highest in 30 months. The core inflation rate hit 1.8 per cent, a two-year high. Rising meat prices were one of the drivers.
Canada’s consumer price index report for June showed overall inflation running at an annualized 2.4-per-cent rate, its highest in 30 months. The core inflation rate hit 1.8 per cent, a two-year high. Rising meat prices were one of the drivers.
(Thinkstock/Thinkstock)

Market misreading the runes on new inflation data

To hear the financial markets tell the story, Friday’s higher-than-expected Canadian inflation numbers have ratcheted up the chances that the Bank of Canada will change its tune and start raising interest rates sooner than it has been suggesting. Don’t be fooled. The central bank still has plenty of wiggle room before the rising inflation tide is going to swamp its resolve.