20 July 2018

The highest inflation rate with a year-over-year prices growth by 2.9% was reported at Prince Edward Island. Meanwhile, Quebec showed the lowest increase by only 2%.

Another report by Statistics Canada says that retail sales were up by 2% in May to $50.8 billion, while April saw a 0.9% decrease.

Douglas Porter, chief economist at BMO, believes bad weather conditions in April (particularly in case of Ontario and Quebec) affect retailers negatively.

Such strong results in retail sales and the inflation growth may increase the chances for another rate hike by the Bank of Canada in 2018.

On the other hand, in the last monetary policy report on July 11, Bank warned that ” inflation is expected to edge up further to about 2.5 per cent before settling back to 2 per cent by the second half of 2019″ so we see no surprises here and don’t think the latest data will push central bank to act in a rush.

The next central bank’s rate meeting is on September 5.