07:24 AM EDT, 08/22/2025 (MT Newswires) -- Canadian producer prices topped expectations in July, with a 0.7% monthly spike lifting the yearly rate to a four-month high of 2.6%, said Bank of Montreal (BMO).

Among consumer items, food and electronic products rose

materially in the past year -- with some nudging from recent counter-tariffs -- while clothing and energy costs were lower, noted the bank.

Even the higher PPI rate is consistent with some further decline in headline CPI inflation, stated BMO.

In addition, the outlook for producer inflation will be guided by

commodity and import prices, both of which have been calm.

Together with soft labor market conditions and sagging new home prices and rents, this suggests the still-warm 'core' or underlying rate of consumer inflation should cool, helping to pry open the door for further monetary easing, according to the bank.