Economics
Broadening Disinflation Challenges Bank of Canada Narrative
- Analysis of CPI components shows weakest dispersion since 2013
- Inflation slowed to 18 month low in June; core rates higher
Feeble Inflation Underpins Bank of Canada Hike Conundrum
This article is for subscribers only.
Growth may be broadening in Canada, but price pressures are a completely different story.
Inflation slowed to 1 percent in June, its lowest level in 18 months and a full percentage point below the Bank of Canada’s 2 percent target. Of 19 major components in the Consumer Price Index, the share with inflation rates below zero in June is the highest since 2013, even as the nation’s economic growth tops the Group of Seven leader board. The proportion of CPI components with a higher inflation rate relative to one year ago, meanwhile, hasn’t been this low since May 2013.