Canada's annual inflation rate eases to 1.7% in July
Analysts polled by Reuters had forecast the annual inflation rate at 1.8% and the monthly inflation rate at 0.3%. The CPI increased by 0.3% in July from 0.1% in June on a monthly basis, Statistics Canada said.
Fuel prices dropped by 16.1% on a yearly basis in July, following a 13.4% decline in June. On a monthly basis the price of he fuel dropped as geopolitical tensions eased and crude oil producing nations increased output.
The elimination of carbon levy on purchase of petrol has helped bring down the cost of the fuel on a yearly basis and is expected to maintain a downward pressure on the CPI basket for another eight months.
This has helped the overall consumer price index to clock a rate below the mid-point of the Bank of Canada's 1% to 3% target range, even as there are signs of rising prices of food.
Excluding gasoline, the CPI rose 2.5% in July, Statscan said.
The main drivers of the increase in costs were rise in food prices and shelter costs, StatsCan said. Food prices, which contributes close to 17% to the overall CPI basket, rose by 3.3% in July from 2.9% in June.
Shelter costs, the biggest component of the CPI basket, rose 3% in July from 2.9% in June, marking the first increase since February last year. This was driven by a smaller decline in cost of natural gas and rise in rents by 5.1%.
Core measures of inflation, which are closely tracked by the Bank of Canada have remained resilient and hovered around the top of the bank's preferred range of CPI.
Money markets are betting the odds of a rate cut on September 17 at 32% after the bank has stayed put at 2.75% for its last three rate decision meetings.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
RTÉ News
10 hours ago
- RTÉ News
UK inflation rises to 3.8% in July, ONS says
British inflation hit its highest in 18 months in July when it increased to 3.8% from 3.6% in June, official data showed today, once again leaving the country with the biggest price growth problem amongst the world's big rich economies. As well as the rise in the headline rate, which was the highest since January 2024, inflation in Britain's services sector - which is watched closely by the Bank of England - accelerated to 5% from 4.7% a month earlier. The Bank of England had expected headline inflation to rise to 3.8% in July with services prices rising by 4.9%. Economists polled by Reuters had mostly expected rates of 3.7% and 4.8% respectively. Sterling rose slightly after the data was published. The Bank of England cut interest rates this month but only after a narrow 5-4 vote by policymakers and the Monetary Policy Committee suggested it would slow the already gradual pace of its reduction in borrowing costs due to inflation's persistence. "Today's inflation data will reinforce the Monetary Policy Committee's cautious approach to cutting interest rates going forward," Martin Sartorius, principal economist at the Confederation of British Industry, said. "While inflation is projected to ease next year, the risk of second-round effects means that the MPC will not race to loosen policy in the near term," he added. Inflation in Britain is running higher than in the US, where it held at 2.7% in July, and in the euro zone where it is expected to remain around the European Central Bank's 2% target over the coming years. By contrast, the Bank of England thinks British inflation will hit 4% in September, double its target, and stay above 2% until mid-2027. Some of the difference with inflation in other countries reflects how energy and other utility prices are regulated in Britain. Big increases in utility bills in April have boosted year-on-year inflation comparisons. Britain's relatively tight labour market, which economists say has become more rigid since Brexit, is also putting upward pressure on prices. Wage growth in Britain has slowed but at about 5% it is too high for the Bank of England to feel comfortable about consumer price inflation returning rapidly to 2%. Furthermore, employers say that a tax increase on them in April and a big jump in the minimum wage are forcing them to put up prices. Today's data showed the biggest contributor to the rise in inflation in July was from transport, particularly air fares. Food and non-alcoholic drink prices - which the Bank of England says are big influences on how the public thinks about the inflation outlook - were 4.9% higher than a year earlier, the biggest rise since February 2024. ONS data published last week painted a picture of an economy with enough momentum to keep inflation high. Output grew by more than expected in the second quarter and the labour market, while still losing jobs, showed signs of stabilisation. Data published earlier today showed basic pay settlements by British private-sector employers held at 3% in the three months to July for the eighth monthly report in a row by data firm Brightmine.
Irish Examiner
11 hours ago
- Irish Examiner
Kenmare urges decision on Mozambique rights renewal
Titanium miner Kenmare Resources said on Wednesday it could seek arbitration over delays to an extension of its mining rights in Mozambique. The Dublin-headquartered company owns the Moma Titanium Minerals mine on the north-east coast of Mozambique, mainly producing ilmenite. The mineral is a source of titanium dioxide used mainly in industrial paints and coatings as well as in electronic equipment, packaging, pharmaceuticals and cosmetics. Kenmare said it has been in inconclusive talks with the Mozambican authorities since 2022 to renew a 20-year mining and export agreement that lapsed in December 2024. "We are concerned at the continued extension of this process," Kenmare managing director Tom Hickey said in a statement. "While we remain hopeful of a successful conclusion to negotiations, we reserve the right to safeguard Kenmare's contractual entitlements, up to and including arbitration, if an agreement cannot be reached," he added. Hickey told Reuters in an interview that the royalty rate was a major hurdle in agreeing new terms. "We've been told, when this agreement went to the Council of Ministers back in March, the royalty was the principal sticking point," Hickey said. "We have made a proposal that we hope will be seen as satisfactory to address that, but we just want a conclusion," he added. The Mozambican government was not immediately available to comment. Kenmare's proposals include a phased increase in the royalty rate from 2.5% in 2025 to 3.5% over the course of the 20-year agreement, a withholding tax on payments to non-Mozambican suppliers as well as further capital investments and contributions to community development projects. On Wednesday, Kenmare reported $160 million of mineral sales in the six months to June 30, a 3% increase on the same period last year. Weak prices in an oversupplied market slashed its half-year profit by 71% to $6.1 million. Reuters
RTÉ News
a day ago
- RTÉ News
Canada's annual inflation rate eases to 1.7% in July
Canada's annual inflation rate eased to 1.7% in July from 1.9% in the previous month as lower year-on-year gasoline prices kept the consumer price index low, but core measures of inflation stayed sticky, data showed today. Analysts polled by Reuters had forecast the annual inflation rate at 1.8% and the monthly inflation rate at 0.3%. The CPI increased by 0.3% in July from 0.1% in June on a monthly basis, Statistics Canada said. Fuel prices dropped by 16.1% on a yearly basis in July, following a 13.4% decline in June. On a monthly basis the price of he fuel dropped as geopolitical tensions eased and crude oil producing nations increased output. The elimination of carbon levy on purchase of petrol has helped bring down the cost of the fuel on a yearly basis and is expected to maintain a downward pressure on the CPI basket for another eight months. This has helped the overall consumer price index to clock a rate below the mid-point of the Bank of Canada's 1% to 3% target range, even as there are signs of rising prices of food. Excluding gasoline, the CPI rose 2.5% in July, Statscan said. The main drivers of the increase in costs were rise in food prices and shelter costs, StatsCan said. Food prices, which contributes close to 17% to the overall CPI basket, rose by 3.3% in July from 2.9% in June. Shelter costs, the biggest component of the CPI basket, rose 3% in July from 2.9% in June, marking the first increase since February last year. This was driven by a smaller decline in cost of natural gas and rise in rents by 5.1%. Core measures of inflation, which are closely tracked by the Bank of Canada have remained resilient and hovered around the top of the bank's preferred range of CPI. Money markets are betting the odds of a rate cut on September 17 at 32% after the bank has stayed put at 2.75% for its last three rate decision meetings.
