Canada's Inflation Rate Expected to Rise as Gas Prices Skyrocket

Canada's inflation rate is expected to rise in July due to higher gas prices. A Reuters poll of economists predicts that annual inflation will increase to 2.9% last month, up from 2.8% in June.

The pullback in global oil prices in June led to a cooling of inflation, but the renewed hostilities in the oil-producing region sent gas prices higher again in July.

Economists at Royal Bank of Canada (RBC) estimate that gas prices were 25% higher in July than a year ago, compared to a 20% annual hike in June. RBC's Nathan Janzen and Claire Fan expect inflation to rise to 2.9%, matching the consensus.

TD Bank senior economist Andrew Hencic also predicts that inflation will end up around 2.9 or 3% last month, citing volatile energy prices. He notes that food prices are notoriously difficult to predict on a monthly basis due to weather-related disruptions.