Inflation holds steady despite ongoing tradewar risks

So far, so good.

The latest numbers from Statistics Canada show inflation remains well within target range, raising the possibility of a further interest rate cut next month.

“This is a positive inflation report on many fronts as price pressures ease for goods and services,” Canadian Chamber principal economist Andrew DiCapua said. “Sticky core measures in July may put progress at risk, but if this momentum continues, we could see the Bank of Canada move rates lower in September. Time will tell if tariffs are feeding through consumer prices, but there are some upward trends on food and durable goods products that could tilt the scales as the effects of tariffs are realized.”

The Consumer Price Index rose 1.7% on a year-over-year basis in July, down from a 1.9% increase in June.

“Prices for gasoline led the slowdown, falling 16.1% year over year in July, following a 13.4% decline in June,” Statistics Canada’s report said. “Excluding gasoline, inflation rose 2.5% in July, matching the increases in May and June. Moderating the deceleration in July were higher prices for groceries and a smaller year-over-year decline in natural gas prices compared with June.”