Canada's inflation hits central bank's 2% target in August

Posted on September 20, 2024   |  

Canada's inflation reached 2% in August, the first time in over three years, which may lead to future interest rate cuts.

The consumer price index (CPI) increased by 2.0% in August, down from 2.5% in July, slightly lower than expected.

Lower fuel prices, along with decreases in clothing costs and a slowdown in mortgage rate increases, helped ease inflation.

The Bank of Canada's key inflation measures—median and trimmed mean CPI—rose by 2.35%, the slowest rate since April 2021, down from 2.55% in July.

Core inflation, which excludes food and energy, dropped to 2.4% from 2.7% the previous month.

The central bank expects inflation to average 2.3% this quarter and reach its 2% target by late 2025.