Canada’s inflation rate creeps up to 3% after gas prices spike

Higher gasoline prices pushed Canada’s inflation rate up to three per cent in July from 2.8 per cent in June, an increase economists had widely anticipated.

Gasoline prices rose by 25.7 per cent year-over-year in July following a 20.5 per cent gain a month prior, according to monthly data from Statistics Canada released on Monday.

Officials attributed the spike to the ongoing conflict in the Middle East and the blockade of the Strait of Hormuz, along with the partial closure of Red Sea shipping routes in late July.

While inflation ticked higher overall, food inflation slowed to 3.1 per cent year-over-year in July following a 3.9 per cent increase in June.

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Slower price growth for fresh vegetables and chicken, as well as lower prices for cereal products drove the slowdown, which was offset by higher prices for fresh fruit.

July still marked the 18th month that grocery price inflation outpaced overall inflation.

Core inflation measures, which excludes volatile components such as food and gasoline, remained stable in July. CPI-median and CPI-trim hovered at two per cent and 1.9 per cent, respectively.

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