Consumer inflation ticked up to 3% in July, Statistics Canada says

Consumer inflation in Canada edged up to 3.0 per cent on average in July compared to the previous year, Statistics Canada reported Tuesday. This marks an increase from the 2.8 per cent rate recorded in June and surpasses the expectations of most economists polled.

The primary driver behind the uptick in inflation was a rise in gas prices. These fluctuations are closely tied to volatile global oil markets, which have been impacted by geopolitical tensions, including the Iran war and the status of the Strait of Hormuz. A tentative ceasefire in June had previously cooled oil and gas markets, but prices climbed through much of July as the agreement unraveled and fighting resumed.

Economists surveyed by LSEG Data & Analytics had largely anticipated the annual inflation rate to reach 2.9 per cent in July. The actual figure of 3.0 per cent suggests a slightly stronger inflationary pressure than widely forecast.

The Bank of Canada's target range for consumer inflation is between one and three per cent, a level aimed at maintaining price stability while fostering economic growth. The central bank is scheduled to reassess its benchmark interest rate policy on September 2nd, with this latest inflation data likely to be a key factor in its decision-making process.

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Inflation increased to three per cent on average last month compared with a year earlier, up from 2.8 per cent in June, the agency says.