Canada CPI Forecast: August Inflation to Rise to 3.1%

The Canadian economy has regained momentum, leading to an expected increase in August's Consumer Price Index (CPI). Continuum Economics forecasts that CPI will rise to 3.1% year-over-year from 3.0%, with a firmer pace of inflation excluding food and energy at 2.1%.

The Bank of Canada's core rates are expected to remain steady, with the median rate remaining at 2.0%. Continuum Economics also expects CPI ex food and energy to rise to 2.1% year-over-year from 1.9%, which would be the highest since January.

The August CPI is due on September 14th. While some slowing in inflation is expected, particularly in travel tours after a strong July, Continuum Economics does not anticipate a correction below trend in ex food and energy data.