Canadian Inflation Hits 3% Amid Gas Price Surge

Canada's annual inflation rate accelerated to 3% in July, exceeding market expectations of 2.9%, as gasoline prices surged due to renewed US-Iran tensions and higher travel costs.

The monthly consumer price index rose by 0.5%, driven largely by an increase in gasoline costs, which jumped 25.7% annually.

Core inflation measures, such as CPI-trim and CPI-median, came in at 1.9% and 2%, respectively, with analysts suggesting that the Bank of Canada is likely to keep its key policy rate on hold for the remainder of the year.

The increase in gasoline prices was a major driver of inflation, while slower rises in grocery prices helped moderate the overall CPI.