Bloomberg expects Bank of Canada to delay rate cuts at upcoming meeting amid rising inflation

Inflation in Canada picked up in June for the first time in four months, while underlying price pressures intensified, prompting the country's central bank to hold off on cutting interest rates later this month, Bloomberg reported.

Statistics Canada’s data showed that the consumer price index rose 1.9% year-over-year in June, accelerating from May's 1.7% increase. On a monthly basis, the figure edged up 0.1%.

According to the report, inflationary pressure in Canada surged as prices for cars and furniture jumped due to Donald Trump's tariffs, with airfare emerging as the primary contributor to the growth. Excluding energy costs, the inflation rate climbed 2.7% year-over-year.

As Doug Porter of Bank of Montreal noted, the latest data doesn’t give the Bank of Canada enough reason to cut interest rates. The situation is further complicated by a fresh wave of tariff threats from Trump. Charles St-Arnaud of Alberta Central said the Canadian central bank should maintain a wait-and-see stance, delaying any policy decisions until clearer signals emerge.