Canada’s inflation rate hits 2% target, reaches lowest level in more than three years

By The Canadian Press on September 17, 2024.

Statistics Canada is set to release its August consumer price index report this morning. Governor of the Bank of Canada Tiff Macklem participates in a news conference on the bank's interest rate announcement, in Ottawa, on Wednesday, Sept. 4, 2024. THE CANADIAN PRESS/Justin Tang

OTTAWA – Canada’s inflation rate fell to two per cent in August, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.

The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.

Statistics Canada’s consumer price index report says the slowdown was partly driven by lower gasoline prices.

Meanwhile, clothing and footwear prices decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.

The slowdown in price growth last month was steeper than forecasters were expecting and will likely spark speculation of a larger interest rate cut next month from the central bank.

Governor Tiff Macklem recently signalled that the Bank of Canada is ready to deliver larger interest rate cuts, if inflation or the economy slow by more than expected.

This report by The Canadian Press was first published Sept. 17, 2024.