Increasing meat prices continue to help drive inflation across Canada

In July, the annual rate of inflation as measured by the Retail Price Index stood at 1.07 per cent, the National Statistics Office said today.

Leading the increase in annual inflation was an increase in food prices, which were 3.2 per cent higher compared with a year ago, boosted 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. The report from July is not likely to persuade the bank to make a change as it said it judges the underlying inflation in the country at between 1.5% and 1.7%.

Costs for seven of the eight main elements within the worth index have been up from a yr in the past with exclusively the transportation index that features gasoline displaying a decline. Dow Jones and Bloomberg were both expecting a gain of 0.2% on the seasonally adjusted reading.

The challenge would prove particularly hard should the recent bout of oil price weakness persist or worsen, raising the question of whether the Bank of Canada would want to further help the non-energy sector pick up the slack from the energy sector. The energy index was down 7.4% year-on-year in July, and continues to weigh on headline inflation. Prince Edward Island saw prices drop to post its eighth consecutive year-over-year decrease. With twelve straight months of core inflation above the Bank of Canada’s 2% target, it seems that this importance has diminished.

Core inflation, which excludes the most volatile categories out of the consumer price index including fruit, vegetables, mortgage interest and natural gas, increased 2.4%.