Canada's Inflation Rate Holds Steady at Three Percent

Economists predict that Canada's inflation rate held steady at three percent in August, as gasoline prices dropped from their earlier summer highs. This prediction comes ahead of Statistics Canada's release of its consumer price index for August on Monday.

'We're expecting the headline number to not go above three percent,' said Tu Nguyen, an economist at RSM Canada.

The economy is expected to be stable apart from energy prices, which have been driven by the war in Iran. However, Nguyen noted that 'sooner or later' the impact of higher gasoline prices will spread throughout the economy, affecting other products and services due to transportation costs.

RBC economists Nathan Janzen and Abbey Xu agree that despite slight relief at the pumps in August on a monthly basis, gas prices were still up 23 percent from a year ago. They also warn that 'the longer that goes on, the more it sort of spreads throughout the economy' due to transportation costs.