TD Securities forecasts headline inflation at 2.9% year-on-year in July, while core measures remain below Bank of Canada projections.
Canadian headline inflation is expected to climb to 2.9% year-on-year in July, up 0.1 percentage point from June, driven by higher gasoline and food prices. Monthly prices are projected to rise 0.4%, offset partially by travel services.
Core inflation measures, CPI-trim and CPI-median, are forecast to hold at 1.8% and 1.9% year-on-year, respectively, or 1.6% on a 3-month annualized basis. These figures remain below the Bank of Canada’s July Monetary Policy Report projection of 2.0% for the third quarter.
The ex-food and energy component is expected to stay stable at 1.7% year-on-year, with diffusion indicators showing no significant increase in inflation breadth. The data reinforces a focus on core inflation trends rather than headline moves.