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A sign is pictured outside the Bank of Canada building in Ottawa, Ontario


Will inflation reports lead to rate hikes?

Inflation in Canada rose to 3.3% in July after a two-year-plus low of 2.8% in June, driven largely by mortgages and a slow decline in gas prices. Despite the slight uptick, some say indicators in the underlying measures of core inflation – which excludes volatile food and energy prices – and a softer job market may give the Bank of Canada a reason to hold interest rates at 5%. But that core inflation is higher than economists would like, says Graeme Thompson, a Global Macro senior analyst at Eurasia Group, and the CPI is adding pressure on the Bank to raise rates when it meets in early September.

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