Canadian Inflation Hits 3% on Soaring Gas Prices

Canada's inflation rate rose to 3% in July, driven by surging gasoline prices. According to Statistics Canada, consumer prices increased by 0.5% over the month, pushing year-on-year inflation into the Bank of Canada's target range.

The main contributor to the rise was energy costs, with gasoline prices up 25.7% from a year earlier. Travel expenses also rose as Canadians paid more for flights and hotels. However, the Bank of Canada's preferred 'core' gauges remained near 2%, suggesting underlying price pressure is not accelerating.

Despite the increase in headline inflation, economists surveyed by Reuters believe that the Bank of Canada will leave its key policy rate unchanged for the rest of the year. This is because core inflation remains stable around 2%, which typically leads the central bank to keep interest rates steady.