Risk of sustained inflation surge is limited, says CPA Canada economist
Canada’s June inflation figures back up the Bank of Canada’s decision to leave borrowing costs unchanged, with core price growth staying close to target even as oil markets swung sharply through the month.
CPA Canada’s chief economist, David-Alexandre Brassard, says the headline number was largely a function of energy prices rather than any broad shift in the inflation picture. “Headline inflation continues to dance to the tune of oil prices, which moved lower in June as tensions in the Middle East temporarily eased,” he says. “What’s encouraging is that core inflation remained close to target, suggesting broader price pressures remain well anchored despite recent energy markets volatility.”
Goods prices still climbed faster than services prices in June, though the two moved closer together as oil costs eased back. Brassard notes the figures point to an economy where faster growth hasn’t translated into broader price pressure.
