Unexpectedly weak data on inflation, retail sales cloud central bank’s next step
OTTAWA — A pair of unexpectedly soft economic reports are creating fresh doubts about the timing of the Bank of Canada’s next interest rate hike.
For months, experts have been predicting Bank of Canada governor Stephen Poloz to raise his benchmark rate at next month’s meeting. But broadening economic unknowns — mostly linked to trade concerns around U.S. President Donald Trump’s protectionist agenda — have begun to lead some analysts to wonder if Poloz will stand pat on July 11.
And on Friday two reports from Statistics Canada added more uncertainty to the interest rate outlook.
One release by the agency found Canada’s annual inflation rose at a pace of 2.2 per cent in May for the second straight month. The number, however, was cooler than market expectations of 2.6 per cent.