Canada’s annualized inflation rate rose to 1.9% in August, up from a 1.7% increase in July.
Statistics Canada reports that the Consumer Price Index (CPI) decreased 0.1% month-over-month in August. On a seasonally adjusted monthly basis, the CPI was up 0.2%.
Economists polled by the Reuters (TRI) news agency had expected inflation would rise an annualized 2% in August.
The annualized inflation rate of 1.9% remains below the Bank of Canada’s 2% target.
The main contributor to August’s rise in consumer prices was gasoline purchased at the pumps. Gas prices fell less year-over-year in August (down 12.7%) than in July (down 16.1%).
Gasoline prices in Canada have been on the decline after the federal government in Ottawa suspended its carbon tax applied to consumer purchases at the pumps.
Excluding gasoline, inflation in Canada rose an annualized 2.4% in August, down from growth of 2.5% in each of the previous three months.
Also exerting downward pressure on inflation in August were lower prices for travel tours and fresh fruit, said Statistics Canada.
The latest inflation reading comes a day before the Bank of Canada announces its latest decision on interest rates.
A majority of futures traders expect Canada’s central bank to cut interest rates by 25-basis points at the conclusion of its Sept. 17 meeting.
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