(Ottawa) Inflation continued its downward trend in Canada last month, as the consumer price index rose 2.5 per cent year-over-year, down from the 2.7 per cent increase in June and the smallest increase since March 2021.
According to Statistics Canada, the slowdown in overall inflation growth was widespread, but more pronounced price declines were observed in the areas of package tours, motor vehicles and electricity.
Although housing costs remain the main driver of inflation, price growth slowed last month to 5.7% year-over-year.
Package tour prices declined 2.8% year-on-year in July, after increasing 7.4% in June. This decline was mainly due to a year-on-year effect, as there had been a sharp increase in prices in July 2023 with the end of pandemic-related health restrictions.
As for motor vehicle prices, they fell 1.4% year-over-year in July, after falling 0.4% in June, in part because dealers saw their inventory levels improve compared to last year.
Year-over-year, electricity prices fell 0.8% in July, after rising 2.4% in June.
In Quebec, however, inflation increased slightly last month, from 2.2% in June to 2.3% in July.
Against a backdrop of slowing national inflation, analysts largely expect the Bank of Canada to continue cutting its key rate at its upcoming meetings.
The central bank is due to provide its next update on the policy rate on September 4.