UBS Sees Canada Inflation Ticking Up to 2.9% in July

UBS, a global investment banking firm, has forecasted Canada's inflation rate to tick up in July to 2.9% from 2.8%, mainly due to energy prices, ahead of Monday's Statistics Canada release.

The bank expects the consumer price index (CPI) to rise 0.4% in July versus June, with energy doing most of the work and food prices rebounding. However, UBS believes that this increase may be short-lived as retail gasoline prices have already slipped in August, which could pull the headline rate back down if the trend holds.

The bank also expects core inflation to look a touch cooler, with core CPI up 0.2% in July and the annual core rate easing to 1.7% from 1.8%, helped by softer recreation, education, and transportation prices, partly offset by firmer shelter and health-related costs.