World Economy

Canada CB to Ease Monetary Policy

Canada CB  to Ease  Monetary PolicyCanada CB  to Ease  Monetary Policy

Canada’s annual inflation rate in August dipped to a 10-month low and the value of retail trade unexpectedly fell in July, according to weaker-than-expected reports seen keeping the central bank more inclined to ease monetary policy than tighten, Reuters reported. Statscan said on Friday that the annual inflation rate in August dropped to 1.1%, the seventh consecutive month it has stayed below the Bank of Canada’s 2% target. Analysts in a Reuters poll forecast the rate would rise to 1.4% from 1.3% in July. The closely-watched core rate, which strips out the price of some volatile items, fell to 1.8% from 2.1%, its lowest rate for two years. The Bank of Canada, which last year cut interest rates twice to counter the effect of low oil prices, said earlier this month that risks to the profile for inflation had tilted somewhat to the downside in recent months. “The Bank of Canada’s concerns about downside risks to inflation seem to be materializing,” said Derek Holt, head of capital markets economics at Scotiabank.