Canada's Inflation Rate Expected to Rise Amid Gas Price Surge

Economists expect Canada's inflation rate to rise in July due to higher gas prices. The Consumer Price Index (CPI) for July is set to be released on Monday by Statistics Canada.

A Reuters poll of economists predicts that annual inflation will increase to 2.9 per cent in July, up from 2.8 per cent in June. This is attributed to the recent conflict between the US and Iran, which led to a surge in global oil prices and subsequently higher gas prices in Canada.

RBC economists Nathan Janzen and Claire Fan expect limited pass-through from higher energy prices, but costly airfares are anticipated to be a pain point in the July report. The Bank of Canada will be monitoring the data closely, as it is set to make its next interest rate decision on September 2.