Canada inflation rises to 3% in July on gasoline surge

Canada's annual inflation rate climbed to three per cent in July, surpassing economists' expectations and reaching the upper limit of the Bank of Canada's target range, Statistics Canada reported on Monday. The increase, up from 2.8 per cent in June, was primarily driven by a sharp acceleration in gasoline prices amid renewed global energy market volatility. The data, released on August 17, provides the central bank with its last major inflation snapshot before its next interest rate decision on September 2.

Gasoline prices surged 25.7 per cent on a year-over-year basis in July, compared with a 20.5 per cent increase in June, Statistics Canada noted. This acceleration was largely attributed to the breakdown of a June ceasefire agreement between the United States and Iran, which had previously helped cool oil markets. Higher jet fuel costs also contributed, lifting airfare prices by 12 per cent following a 9.6 per cent rise in June. Additionally, travel tour prices increased sharply, a trend economists linked to more expensive hotels and flights to United States cities hosting FIFA World Cup games.

However, signs of moderation appeared in other areas. Grocery store inflation...