Canada’s inflation rate hits 2% target [Video]

Inflation finally hit the Bank of Canada’s two per cent target in August after a tumultuous battle with skyrocketing price growth, raising the odds of larger interest rate cuts in the coming months.

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

The slowdown can be attributed in part to lower gasoline prices, Statistics Canada said Tuesday in its consumer price index report.

Clothing and footwear prices also decreased on a month-over-month basis. It marked the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.

The data suggests inflation is no longer threatening and the Bank of Canada should focus on stimulating the economy again, said CIBC senior economist Andrew Grantham. 

“I’m already worried that the economy is a little weaker than it really needed to be to get …