Canada's Inflation Hits 3% as Gas Prices Soar

Canada's annual inflation rate accelerated to 3% in July, slightly more than expected, driven by renewed United States-Iran tensions and higher gasoline prices. The monthly consumer price index rose by 0.5%, also exceeding projections.

The increase in headline inflation had been widely anticipated due to higher energy prices, leaving the trend of underlying or core inflation as a more important signal for the Bank of Canada. Core inflation measures CPI-trim and CPI-median came at 1.9% and 2% respectively.

Gasoline was the major driver of the annual rise in consumer price index, with prices accelerating 25.7% in July against an increase of 20.5% in June. Prices for travel tours also contributed to the yearly rise as consumers paid more for hotels and flights to the United States.