Canadian Inflation Holds Steady Despite Rising Energy Costs

Canada's inflation rate remained steady at three per cent in August, according to Statistics Canada. This holds true despite increasing energy costs.

The consumer price index report showed that overall prices rose by two point four percent excluding gasoline. However, the conflict in the Middle East continued to drive up gasoline prices by 22.8 percent compared to 25.7 a month earlier.

Rent prices and travel costs also trended higher, with rent increasing 2.8 percent year-over-year and air travel rising due to fuel surcharges and a decline in Canadian travel to the United States in 2025.

Financial odds of a Bank of Canada rate hike have jumped to 60 per cent as of midday Monday, according to LSEG Data & Analytics, but economists say there is little evidence of spillover into broader inflation. However, oil prices remain a concern and could drive angst among policymakers if they persist.