Inflation rate’s sizzle only temporary blip: Bank of Canada governor

Inflation rate’s sizzle only temporary blip: Bank of Canada governor

OTTAWA — The head of the Bank of Canada says he’s fine with last month’s hot inflation number because he sees it as just a temporary spike in the data.

Statistics Canada recently reported that year-over-year consumer prices rose at their fastest pace in nearly seven years in July when they reached three per cent.

In an interview Friday with CNBC, governor Stephen Poloz says the underlying or core inflation rate —which omits volatile items like gasoline prices — remained close to the central bank’s ideal target of two per cent.

Poloz says the inflation boost was caused by the one-time effects of higher energy prices, minimum-wage increases and exchange-rate movements.

Speaking in Jackson Hole, Wyo., ahead of this weekend’s annual meeting of central bankers, Poloz says the Bank of Canada had been expecting inflation to move higher this year on a short-term basis.

But last month the Bank of Canada predicted inflation to only rise to 2.5 per cent this year before it slows back down to about two per cent.

“These are transitory factors,” he said when asked about July’s three per cent inflation reading.

“Our measures of core inflation, which extract all the noise from the data, are all right around two per cent — so, very close to target.”

The central bank raises its interest rate as a way to help keep inflation from climbing above its ideal target range of one to three per cent.

Poloz introduced a quarter-point increase to the benchmark rate in July for his first move in six months. It was his fourth hike in a year and brought the interest rate to 1.5 per cent.

In the interview, Poloz said he still sees more interest rate hikes on the horizon for Canada. Some economists believe he could raise the rate again as early as next month.

The Canadian Press

inflation

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Samson Cree Nation reeling after 10 year-old-boy-shot, 13-year-old charged with manslaughter

‘Don’t give up, keep praying, we will get through this’

The latest numbers on COVID-19 in Canada for Aug. 9

The latest numbers of confirmed COVID-19 cases in Canada as of 4:00… Continue reading

Team says technical issues from ‘unprecedented demand’ left Oilers raffle in limbo

EDMONTON — The Edmonton Oilers’ record-setting online 50/50 raffle from Friday with… Continue reading

Update: Possible drowning at Pigeon Lake involved man and woman from Edmonton

Bodies recovered from Pigeon Lake’s northeastern shores.

QUIZ: Do you know the truth?

In what has been described as a post-truth era, how much do you know about truth and lies?

Cast your votes for Best of Red Deer

The Advocate’s Best of Red Deer Readers’ Choice Awards are back. Community… Continue reading

‘Do our lives count for less?’: COVID-19 exposes cracks in disability aid

Karyn Keith says she isn’t asking for much. All she wants is… Continue reading

Who can dismiss the Governor General? A look at protocols and possibilities

OTTAWA — With Gov. Gen. Julie Payette finding herself the focus of… Continue reading

Liberals turn over thousands of pages on WE decision

OTTAWA — The federal Liberal government has turned over thousands of pages… Continue reading

US hits 5 million confirmed virus cases, Europe is amazed

ROME — With confirmed coronavirus cases in the U.S. hitting 5 million… Continue reading

University of Victoria and women’s rowing coach sued over alleged verbal abuse

VANCOUVER — A former member of the University of Victoria’s varsity women’s… Continue reading

Parents, teachers press Quebec to revise back-to-school plan amid COVID-19

MONTREAL — For Politimi Karounis, August is usually spent buying new backpacks,… Continue reading

Most Read