British Columbians got some relief at the check-out counter last month. Fellow Canadians received a lot more.
Inflation on the West Coast cooled to 2.4 per cent in August compared with 2.8 per cent in July, according to data released Tuesday from Statistics Canada.
While the cooling trend was a positive sign for an economy battling high inflation rates the past few years, B.C.’s inflation rate is now the highest among all the provinces.
Nationally, inflation fell to two per cent. Ontario has the next highest inflation rate among provinces, coming in at 2.1 per cent.
"Broader inflation pressures look to be back around the 2 per cent inflation target, and interest rates are still at levels high enough to restrict economic growth and push price growth lower," RBC economist Abbey Xu said in a note.
She said this adds up to the Bank of Canada likely cutting its overnight rate by 25 basis points until it reaches three per cent. The key rate currently sits at 4.25 cent following a 25-basis-point cut on Sept. 4.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, wasn’t convinced cuts of 25 basis points were a guarantee.
He said the latest report might tilt the central bank towards a more aggressive path for cutting rates.
“If we get another big downside surprise, calls for a 50[-basis-point] cut will only grow louder,” he said in a note.
