Canada Inflation Holds Steady at 3%, Rate Outlook Remains Stable

Canada's inflation rate remained steady at 3% year-over-year in August, unchanged from July.

The country's food and energy prices were still elevated but showed some easing.

The core gauges, which exclude food and energy prices, stayed closer to the Bank of Canada's 2% objective.

This suggests that underlying inflation pressures remain contained, with limited evidence that higher energy costs are feeding into broader second-round inflation.

Looking ahead, the rate outlook remains stable, with the base case pointing to the Bank of Canada holding policy rates through 2026 and then gradually increasing them in 2027 as the economy strengthens.