REGINA -- Bank of Canada deputy governor Sharon Kozicki says swings in the inflation rate are to be expected in a speech coming after the latest consumer price index report showed inflation climbed in August for the second month in a row.

Statistics Canada reported today that inflation ticked up to four per cent last month, up from 3.3 per cent in July amid higher gasoline prices.

Kozicki weighed in on the numbers during a speech at the University of Regina on Tuesday.

"Ups and downs of the size we've seen in the past couple of months are not that unusual and are one reason why we look at measures of core inflation -- which exclude components with more volatile price movements -- to get a sense of what underlying inflation is," Kozicki said, according to prepared remarks.

She said these measures show inflation has not eased by much recently.

The deputy governor also takes aim at the argument that inflation has come down if mortgage interest costs are excluded from the calculation of inflation.

She notes that even when these costs are excluded, core inflation doesn't appear to be much lower.

Economists reacting to Tuesday's inflation report say the data spells bad news for the central bank, though many expect the Bank of Canada to continue holding rates steady as the economy slows.

The Bank of Canada opted to hold its key interest rate steady earlier this month after recent data showed the economy shrank in the second quarter.

While the central bank held off from raising rates, it warned that the door was still open to more rate hikes if needed. Kozicki reiterated that message on Tuesday.

"We are prepared to raise the policy interest rate further if needed," she said.

This report by The Canadian Press was first published Sept. 19, 2023.