Canada inflation rate picks up in July as food prices rise

Economists interviewed by Reuters said the first interest rate hike in nearly a decade by the Federal Reserve remains possible despite the soft inflation figures since other indicators point to a strengthening economy such us an improving housing sector and tightening labor market.

The Office for National Statistics (ONS) has revealed that the UK’s Consumer Prices Index (CPI) increased by 0.1 per cent in July, turning the country’s UK inflation rate positive.

But that was all a price effect as volumes were flat on the month, although real sales recovered 0.4% in 2Q after a 0.4% decrease in 1Q.

Electronics and equipment retailer gross sales rose 9.four per cent, the quickest in data again to 1991, in a month the place new laws restricted the period of cell phone contracts.

“Following relatively strong growth during much of 2014, the rate of house price growth appears to have moderated in recent months”, says the ONS.

Food prices were up 3.2 per cent compared with a year ago led by meat prices, which rose 6.1 per cent. The price of fresh or frozen beef was up 17.2 per cent from a year ago, while fresh or frozen pork gained 2.0 per cent.

Economists said the reports had few implications for monetary policy, with the Bank of Canada looking through temporary inflation factors.

Statistics Canada said the transportation index, which includes gasoline, was the only one of eight components to show a decline. The group increased 3.0 per cent to $10.2 billion in June, more than offsetting a drop in May. It was down for the ninth month in a row.

“The declines were largely the result of gasoline prices, which were 12.2% lower than 12 months ago”, TD Economics’ Brian DePratto said in a note to investors.