Canada's inflation rate fell to 2% in August

Annual inflation cooled sharply to two per cent in August, according to Statistics Canada, marking a major milestone in the Bank of Canada’s efforts to tame price pressures. That’s half a percentage point lower than the 2.5 per cent annual rate recorded in July and continues a general cooling trend through 2024.

Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate.The Bank of Canada’s sets its benchmark interest rate in an effort to achieve two per cent inflation, according to its mandate, with the view that a two per cent rate of annual price growth provides stability for households making decisions.

The Bank of Canada will hold its next interest rate meeting on Oct. 23.