OTTAWA – Statistics Canada is set to release its inflation figures for August this morning.
A poll provided by Reuters shows economists expect the annual inflation rate rose to two per cent in August, from 1.7 per cent in July.
Core inflation metrics, which are closely watched by the Bank of Canada because they strip out volatile categories, are forecast to remain around three per cent, the upper end of the central bank’s target range.
The inflation report is a key piece of economic data and comes one day before the Bank of Canada is scheduled to announce its next interest rate decision.
Financial markets largely expect the central bank to cut its key lending rate by a quarter point to 2.5 per cent tomorrow as the labour market has weakened and the economy posted a contraction in the second quarter.
However, RBC Economics says it views the Bank of Canada’s decision to cut or hold as a close call, and says there’s still a chance it opts to keep rates unchanged to avoid the risk of pushing inflation even higher.
