Inflation, retail trade data reinforce expectations of gradual rate hike
OTTAWA — The annual pace of inflation fell to its weakest rate in almost two years though retail sales rose for their third consecutive month, Statistics Canada said Friday, reinforcing expectations that any future interest rate hikes by the central bank will be brought in gradually.
Overall, the agency’s latest inflation report found that prices were just one per cent higher last month compared to a year earlier. The June number followed inflation readings of 1.3 per cent in May and 1.6 per cent in April.
The latest deceleration in inflation has moved the rate even further away from the Bank of Canada’s target of two per cent. It’s been dropping since February — the last time it posted a two per cent reading.
Some experts had pointed to weak inflation data as a reason for the central to bank to hold off on hiking its benchmark interest rate, despite signs the economy was building momentum.