By Ketki Saxena
Investing.com -- After falling to 2.8% in June in March - the first time in over two years that it's been in the BoC target range of 2-3% - Canadian consumer prices have once again accelerated, to 3.3% in July.
The increase outpaces economist expectations for a 3.0% reading.
Meanwhile, the average of CPI-median and CPI-trim, came in at 3.65% compared with 3.70% in June - barely moving the needle on the Bank of Canada's core measures of underlying inflation.
Here's a roundup of economist commentary on what is unequivocally a difficult report for the Bank of Canada - and what economists anticipate for the Canadian central bank's next move in September.
Douglas Porter, BMO (TSX:BMO) chief economist
“There’s no sense sugar coating this one — it is not a good report for the Bank of Canada"
“While the bank had anticipated a back-up in headline inflation in their latest forecast, July’s result is already at their call for all of Q3 (3.3 per cent), and the August reading is almost certainly set to be even higher.”
Claire Fan, RBC (TSX:RY) Economist
“Easing in BoC’s ‘core’ CPI measures in July is welcome after months of sticky prints at higher levels, but is far from enough to signal that this period of above-normal inflation is at an end".
Derek Holt, vice president of capital markets economics at Scotiabank (TSX:BNS).
"I think we're getting another round of spiraling upside risks to inflation in Canada"
"Hikes aren't done in my opinion."
Leslie Preston, Senior Economist, TD (TSX:TD)
"Domestic demand in Canada's economy continues to hum along, and as a result we expect progress on inflation to remain disappointing through the remainder of the year."
"This is pushing up expectations that the BoC may pursue another rate hike in the fall months as it gathers more information on the jobs market and overall inflation."
Tiago Figueiredo, Desjardins economist
“As time passes more mortgages will renew at higher rates and any excess savings will be exhausted which should weaken demand going into the latter half of the year"
“Barring any major surprise in the upcoming activity data, we expect the Bank of Canada to stay sidelined on Sept. 6.”