Canada’s annual inflation rate stayed steady at three percent in August, according to data released by Statistics Canada. The slight decrease in gasoline and food prices was offset by a rise in costs for tours and travel. Shelter expenses, including rents and mortgage payments, also saw a slight increase during the month.
In August, consumer prices experienced a 0.1 percent decline. Economists surveyed by Reuters had predicted that annual inflation would remain at three percent. The latest consumer price index information does not reflect the recent surge in crude oil prices resulting from heightened tensions in the Middle East. Gasoline prices across the country have escalated by approximately 21 percent year-over-year as of the latest data.
Bank of Montreal economist Benjamin Reitzes anticipates that rising gas prices will contribute to increased inflation in September. Conversely, RBC economist Abbey Xu noted that there is limited evidence suggesting that the higher energy costs have significantly impacted prices in other sectors of the economy.
Reitzes highlighted the unexpected 0.2 percent monthly drop in food prices in August, primarily driven by reduced prices of fresh fruits and vegetables. However, he foresees that the uptick in fuel expenses will likely counterbalance the affordability of groceries in the upcoming months.
Both Reitzes and Xu stated that the recent data from Statistics Canada aligns with their projections of the Bank of Canada maintaining its current stance. They believe that the central bank is unlikely to consider a rate hike anytime soon, especially given the ongoing challenges posed by the surge in oil prices.