This is a bit stronger than we expected, mainly because of temporary factors, including higher prices for air travel, mobile phones and some food items. Our core inflation measures were also around 2 percent in July, which is consistent with the idea that the economy’s output gap is essentially closed.
Our decision So, with all that as background, let me conclude by talking about the Bank’s decision yesterday. My colleagues and I began our discussions by recognizing that the data indicate the Canadian economy is operating close to full potential, the unemployment rate is near historic lows and inflation—our primary responsibility—is right on target.