Canada's Inflation Expected to Drop to 2.1%, Lowest Since 2021

Economists predict a significant easing in inflation, potentially prompting further interest rate cuts by the Bank of Canada.

Statistics Canada is set to release the August consumer price index, with economists forecasting a 2.1% annual inflation rate, down from 2.5% in July.
The anticipated drop in inflation is largely attributed to a decrease in gasoline prices, along with a general easing in core CPI measures.
The Bank of Canada has already cut its key interest rate to 4.25% and may continue to reduce rates if inflation remains under control.
Canada's unemployment rate rose to 6.6% in August, indicating economic weakness that could further influence the central bank's rate decisions.
Economists suggest that the central bank could accelerate its rate-cutting cycle if inflation continues to decline, potentially reaching a terminal rate as low as 2.25%.