Canada Inflation Rate Expected to Rebound to 2.9% Amid Renewed Hostilities

Statistics Canada will release fresh inflation figures for July, which are expected to show a slight increase in the annual rate of inflation. Economists polled by LSEG Data & Analytics predict that the rate ticked up to 2.9 per cent last month after cooling sharply to 2.8 per cent in June.

The rebounding gas prices likely reversed the progress made in taming inflation, as renewed hostilities in the Middle East sent global oil prices higher again. This development comes after Canadian drivers experienced relief at the gas pumps in June due to peace talks in the Iran war.

The July inflation figures will be crucial for the Bank of Canada's next interest rate decision on September 2. The central bank has held its policy rate steady at 2.25 per cent in six consecutive decisions, balancing volatile global energy prices and US tariffs that are hampering the economy.