Canada Inflation Holds Steady at 3% Despite Rising Energy Costs

Canada's annual inflation rate held steady at 3% in August, matching July's pace. Elevated energy costs continued to put pressure on consumers, while food-price growth moderated only gradually.

The reading keeps inflation above the Bank of Canada's 2% target and comes as the central bank weighs the competing risks of persistent price pressures and a softer economic outlook. The Bank held its policy rate at 2.25% earlier this month, its seventh consecutive decision without a change.

Higher gasoline prices have remained a key driver of headline inflation, with gasoline prices still up sharply from a year earlier despite some relief at the pumps in August. Food inflation has also remained a concern for Canadian households, with grocery prices rising 3.1% from a year earlier in July.