Gas prices locally on Monday morning were among the lowest in the province according to GasBuddy.com. Most stations in the city were at $1.13.9 for regular self serve while the Super Save station on Green Mountain Road was at $1.12.9. (Mark Brett - Western News)

Canadian inflation decelerates to 1.9% as gas prices weaken

August was the sixth straight month that price growth was 1.9 per cent or higher

Canada’s annual inflation rate slowed slightly to 1.9 per cent in August under the weight of declining gasoline prices.

Inflation was firm enough to stick close to the Bank of Canada’s ideal two per cent target — and August was the sixth straight month that price growth was 1.9 per cent or higher.

The price picture, on its own, did not put pressure on the inflation-targeting Bank of Canada to adjust interest rates.

Excluding pump prices, the consumer price index was up 2.4 per cent from a year ago, Statistics Canada said Wednesday in a new report. Gas prices fell 10.2 per cent last month, which followed a decrease of 6.9 per cent in July.

Price growth was also held back last month, compared with a year earlier, by lower costs for traveller accommodation, internet access services and furniture.

On a month-to-month basis, the price of pork declined 2.7 per cent at a time when Canadian pork products are facing tougher restrictions in the key Chinese market. Consumers also paid 6.5 per cent less for fresh vegetables — the largest decline in five years — as temporary price increases due to poor weather in growing regions eased off.

READ MORE: Inflation hits Bank of Canada 2% target for second straight month

The upward pressure on consumer prices, year-over-year, was led by higher costs for airline tickets, mortgage interest and auto insurance.

The cost of air travel climbed 10.3 per cent in August. The increase was largely related to the impact of the grounding of Boeing 737 Max jets during the busy summer travel season, the report said.

Natural gas prices rose to 5.8 per cent last month, up from a 3.2 per cent increase in July.

The average of Canada’s three gauges for core inflation, which are considered better measures of underlying price pressures by excluding volatile items like gas, hit the central bank’s target at two per cent. The reading was 2.03 per cent in July.

Canada’s domestic economy has been resilient even as trade wars inject significant uncertainty into the slowing global economy.

Many forecasters have been expecting the Bank of Canada to cut its overnight lending rate before the end of the year and perhaps as early as its Oct. 30 policy announcement.

Economists on average had expected an inflation reading of 2.0 per cent for August, according to financial markets data firm Refinitiv.

This report by The Canadian Press was first published Sept. 18, 2019.

Andy Blatchford, The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Comments are closed

Just Posted

Police use tear gas to apprehend Saanich woman threatening neighbours, police

Woman facing possible criminal charges after standoff with police

Canadians with disabilities disproportionately hit by COVID-19 pandemic

More than four out of 10 British Columbians aged 70 and up have various disabilities

Laid-off hotel workers demanding the right to return to work at Victoria protest

Businesses in accommodation and food sector report laying off 80 per cent of workforce

B.C. records 31 new cases, six deaths over three days due to COVID-19

There are 166 active cases in B.C., 16 people in hospital

96-year-old woman scales B.C. butte with help of family, friends

‘I did as I was told and I enjoyed every minute of it’

Parallel crises: How COVID-19 exacerbated B.C.’s drug overdose emergency

Part 1: Officials say isolation, toxic drug supply, CERB, contributing to crisis

Camping offers a great pandemic escape, for less money than you might think

But for many first-timers, knowing what to bring can be a challenge

Turbulence in Canadian opinion on airlines COVID-19 response: poll

Thousands of people have beseeched Transport Minister Marc Garneau to compel airlines to issue refunds,

Police issue warning after baby comes across suspected drugs in Kamloops park

The 11-month-old girl’s mother posted photos on social media showing a small plastic bag containing a purple substance

Collision results in train derailment just east of Golden

The derailment occurred Sunday night, according to a statement from CP

Most Read