Statistics Canada reported this morning that the Consumer Price Index (CPI) increased by 1.9% year over year in June. This represents an increase from the 1.7% pace observed in May. Excluding energy, inflation remained stable at 2.7% in June.
The federal agency noted stronger price growth in certain durable goods, such as motor vehicles (+4.1%) and furniture (+3.3%), which contributed to upward pressure on June’s CPI.
By region, Quebec and Manitoba are currently experiencing the strongest price increases, both recording a 2.2% year-over-year inflation rate in June.
Implications
The increase in the inflation rate in June, combined with encouraging employment data released last week, reduces the likelihood that the Bank of Canada will cut its policy rate on July 30. This is especially true as the effects of tariffs are expected to increasingly show up in retail prices over the coming months.