Canada inflation slows further to 2.5% in July

Inflation in Canada decreased to 2.53% at an annual basis in July, the second consecutive drop and reached the slowest growth rate since March 2021, Statistics Canada reported on Tuesday.

The two core inflation measures favored by the Bank of Canada (BoC)— CPI-trim and CPI-median, both of which exclude volatile components in CPI calculations — continued to edge toward the central bank’s 2% inflation target, down to 2.65% and 2.37%, respectively. This marked the forth month in a row that both readings are within BoC’s acceptable inflation range of 1%-3%.

Drop in prices for travel tours, which is falling 2.8% year-over-year due to base effect from a 15.5% monthly shoot up in prices last July, and for passenger vehicles, which decreased 1.4% annually, are cited by the StatCan as major drivers leading the headline CPI figure lower.