Canadian inflation holds steady at 2.0pc in July

OTTAWA: Canada's annual inflation rate held steady in July at 2.0% because of lower costs for services, including telecoms, that were offset by higher prices for durable goods, Statistics Canada said on Wednesday.  Analysts in a Reuters poll had forecasted an inflation rate of 1.7%. Canada's inflation rate in June was 2.0%.

Statistics Canada said Canadian consumers paid less for telephone services in July following a industry-wide shift in how prices are set for cellular plans. At the same time, the price of smartphones and tablets rose 42.5% month-over-month following a reduction in subsidies for wireless devices.

Canadian cellphone bills are expected to be a common issue for all three of Canada's major political parties in the upcoming Oct. 21 federal election, where Prime Minister Justin Trudeau is facing tight competition from his opponent Conservative Party Leader Andrew Scheer.

Wednesday's data also comes as the Bank of Canada is set to release its next interest rate decision on September 4. The bank has held interest rates steady since October 2018 and is not expected to move for the rest of the year.

CPI common, which the central bank says is the best gauge of the economy's underperformance, rose slightly in July to 1.9% - coming in above analyst projections of 1.8%.

Meanwhile, CPI median, which shows the median inflation rate across CPI components, and CPI trim, which excludes upside and downside outliers, were 2.1%.