Canadian Inflation Rate Stays Firm at Three Per Cent Amid Rising Gas Prices

Canada's annual inflation rate remained steady at three per cent in August, according to Statistics Canada. The agency reported that shelter costs, including rents and mortgage payments, rose slightly during the month. Gasoline prices eased slightly, but food costs dropped by 0.2 per cent due to cheaper fresh fruit and vegetables.

However, Benjamin Reitzes of Bank of Montreal expects gas prices to fuel hotter inflation in September, predicting a rise of at least five per cent. He believes this could lead to an acceleration in headline Consumer Price Index (CPI) for the month.

RBC economist Abbey Xu disagrees, stating that there is limited evidence so far that higher energy costs are driving prices higher elsewhere in the economy. She notes that price growth remained high for energy-intensive categories such as air travel but has not spread across the broader consumer basket.