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“Cast your mind back to last month, when inflation caught markets off-guard. Headline CPI spiked on higher energy costs, and tomorrow’s August data should be a similar story,” ING analysts argue.

Key quotes

“We expect headline inflation to come in at 2.8% year on year, a mild slowdown from July’s 3% bumper figure, however, we don’t expect to see any substantial impact from tariffs.”

“What really matters for the Bank of Canada is core inflation, and here the news has been pretty good. All three of the Bank’s main measures of core prices are floating around the 2% target. These are likely to come under some upward pressure as the effect of the increase in minimum wages translate into higher prices. The slightly weaker Canadian dollar may also add some impetus.”

 “This makes it likely that we’ll get another rate hike from the Bank of Canada in October, although as ever the odds really hinge on Nafta progress. Talks are entering an intense phase, with an intention for a new deal to be signed before Mexican President Enrique Pena Nieto leaves office in December.”