Investing.com — Canada’s inflation rate increased to 3% in July as ongoing Middle East conflict pushed gasoline prices higher, while core inflation measures stayed below the central bank’s target.
Statistics Canada reported Monday that gasoline prices climbed 25.7% year-over-year in July, up from a 20.5% increase in June. Excluding gasoline, the consumer price index rose 2.2% for the third consecutive month. On a monthly basis, the CPI increased 0.5%.
Economists had forecast headline inflation would reach 2.9%, up from 2.8% in June.
The average of the Bank of Canada’s preferred core inflation measures rose to 1.95%, a slight increase from the previous month and below the central bank’s 2% target.
Travel tours and air transportation prices also contributed to higher inflation in July, rising 15.2% and 12% respectively. The World Cup boosted demand while jet fuel costs increased.
Grocery prices rose 3.1% on an annual basis, down from 3.9% in June. July marked the 18th straight month that grocery prices increased faster than overall inflation.
Shelter price inflation rose 1.3%, the slowest rate since May 2020. Shelter costs have increased at a rate below 2% since the start of the year as the Canadian housing market remains soft.
Ontario was the only province that did not see inflation rise last month. Declines in homeowners’ replacement cost and natural gas prices drove the result.
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