Canada Inflation Climbs to 3% in July

Canada’s annual inflation rate climbed to 3% in July, driven largely by a rebound in gasoline prices and higher travel-related costs. A 0.5% monthly increase was led by energy prices, while core inflation measures remained near the 2% mark, reinforcing the view that underlying inflation is steady. Economists argued the Bank of Canada is likely to keep policy rates in its 1% to 3% target range for now, given the persistent but contained core measures. Gasoline was the main driver of the yearly rise, with prices up about 25.7% year over year in July, alongside higher costs for travel tours and hotels tied to World Cup-related travel. Grocery inflation cooled somewhat in July but remained elevated, continuing an 18-month trend of food costs outpacing the overall CPI. Fresh inflation data were anticipated by analysts, with markets watching for how energy shocks and geopolitical tensions might shape policy and pricing ahead of the BoC’s next moves.