Canada’s inflation rate has grown faster than market expectations for the second month in a row. Rising gasoline prices pushed up the overall figure.
Statistics Canada announced on the 19th that the Consumer Price Index (CPI) for August increased by 4% compared to the same month last year, the largest growth rate since April. The median estimate of economists polled by Bloomberg was for a 3.8% rise. In July, it rose 3.3%.
In August, sales rose 0.4% month-on-month, which was twice the market forecast.
In the overnight index swap (OIS) market, there was growing speculation that the Bank of Canada (the central bank) would resume tightening measures. The probability of further interest rate hikes at the October monetary policy meeting has increased from about one-third before the CPI announcement to almost 50-50.
Canadian government bond prices have fallen sharply. The two-year bond yield briefly hit 4.897%, the highest level since 2001.
Today’s CPI statistics once again highlight the challenges of the current phase in the fight against inflation.
Original title:Canada Inflation Quickens to 4%, Driven by Higher Gas Prices (2)(excerpt)
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