By Ketki Saxena
Investing.com -- Tomorrow at 8:30 am ET, Statistics Canada is expected to release July's Consumer Price Index (CPI) data.
After easing to 2.8% year over year in June (falling from 8.1% a year earlier in June 2022), Economists at Canadian banks expect CPI to accelerate again in July, driven largely by a rise in energy prices.
The good news? Economists believe that while headline inflation will show an increase, the Bank of Canada's preferred core measures will likely continue to decelerate - providing further impetus for the Bank of Canada to remain on the sidelines at its next policy meeting.
Here's a roundup of economist expectations for tomorrow's CPI release.
TD (TSX:TD)
Economists at TD are looking for CPI to edge back up to 3.1% "as base effects push inflation back above the target range", and as service rise again.
Core measures meanwhile are expected to "edge 0.2pp lower to 3.6% YoY and break below the 3.5-4.0% range on a 3m saar basis".
CPI-trim/median is expected to edge up +0.3% MoM
RBC (TSX:RY)
RBC expects year-over-year inflation to come in at 2.9%.
RBC expects CPI to largely be pushed up by energy prices. "Though gas prices were still below year-ago levels in July, the decline was smaller than in June," Janzen wrote in a forecast published last week."
Food price growth is also expected to have "remained high in July", although "the pace of increases likely continued to slow, reflecting the lagged impact of lower commodity prices and easing supply chain disruptions."
National Bank (TSX:NA)
National Bank expects CPI to tick in at 3.0%, however, they expect core measures to decrease, "with CPI-med likely moving from 3.9% to 3.6% and CPI-trim from 3.7% to 3.5%."
National Bank also expects the rise in CPI to be driven by "An increase in gasoline prices"
CIBC (TSX:CM)
CIBC also predicts that inflation will edge up, touching 3.1%, due to "gasoline prices on the rise this July", and even despite a "modest deceleration in food price inflation".
CIBC also expects that core prices excluding food and energy will "look a bit hotter than in the prior two months, with the deceleration in mortgage interest costs potentially stalling and prior negative contributions to inflation from internet and telephone services unlikely to be repeated."
BMO (TSX:BMO)
BMO is also calling for a rise in headline inflation to 3.1% "with risks skewed to a slightly higher print", with price increases also driven by energy prices.
"Gasoline has very quickly gone from being a big drag on inflation to being close to neutral to possibly adding to inflation, again"
However, BMO expects core inflation metrics will likely show a slowdown.