Bank of Canada Rate Increase on the Horizon, Macquarie Reckons
Dow Jones08-18
1457 ET - Macquarie continues to expect the Bank of Canada will raise interest rates before long after an acceleration in inflation in July. Its baseline case is for an increase of a quarter percentage point in October, though economist David Doyle says December also is a possibility. Headline inflation in Canada was at 0.4% on-month in July and 3% annually, with a spike in gasoline prices a driver. Core inflation measures also picked up on a monthly basis, though remain below 2% on-year. Doyle says weakness in housing remains a key driver behind subdued year-over-year core inflation readings. "Disinflation in owned accommodation has been steep, but is now showing signs of a potential bottoming," he says.
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