Institution: Canada's core CPI will remain moderate until the end of 2026

Golden Ten Data reported on June 17 that Oxford Economics expects Canada's core inflation rate to remain below 2% for the rest of 2026. Economist Michael Davenport stated that this forecast reflects the existence of excess idle capacity in the country's economy, a slowdown in population growth, as well as uncertainty for businesses and households related to U.S. trade policy, Middle East conflicts, and AI deployment. If the Bank of Canada is to raise interest rates this year, it would need to see “clear signs of inflation broadening” in the CPI basket, as well as a rise in long-term inflation expectations. The institution's preliminary estimate is that the Bank of Canada will raise its policy rate by 0.5 percentage points in the first half of 2027, but Davenport noted this depends on the success of trade negotiations between the U.S. and Canada.