Canada's Inflation Rate Hits 3%, But Underlying Pressures Remain Tame

Canadian inflation rose to 3% year-over-year in July from 2.8% in June, driven by higher energy prices. Energy costs increased 16.6% over the past year, with gasoline prices up 26% compared to last year.

Underlying inflation pressures remained contained, with core measures such as CPI-trim and CPI-median holding near their 2% target. Food price inflation eased slightly to 3%, but still put pressure on household budgets.

The Bank of Canada's preferred core measures showed little change compared to the previous month, suggesting that higher energy costs have not spread broadly across the economy.