She notes that “headline CPI rose 0.2% in August, less than expectations for 0.3%. On a year-over-year basis, the inflation rate inched lower to 1.2% from 1.3% in July. The Bank of Canada's core measure rose an expected 0.3% in August and stood 1.6% higher than in August 2011.”
She notes that the inflation backdrop remains benign with the low starting point for the third quarter of 2012 likely to result in the slowest average increase since mid 2010.
She continues, “The Bank of Canada's measure of the core inflation rate has also trended lower; although at 1.6%, it is closer to the Bank's 2% target. Growth indicators point to the economy expanding at a rate just shy of its potential in the third quarter of 2012, which would be in line with the pace of the prior three quarters.”