Canadian Inflation Remains Steady at 3%, Energy Costs Still Worrying

Canada's annual inflation rate remained at 3% in August, matching July's pace. The reading keeps inflation above the Bank of Canada's 2% target and comes as the central bank weighs the competing risks of persistent price pressures and a softer economic outlook.

The Bank held its policy rate at 2.25% earlier this month, its seventh consecutive decision without a change. Analysts say that Canada's 3% headline inflation rate will attract attention, but most of the pressure is still coming from energy while the Bank's preferred core measures remain close to target.

Ryan Kirkley, CEO & Co-Founder at Global Settlement Network, notes that 'much of the recent price pressure remains concentrated in energy-related categories.' Food inflation has also remained a concern for Canadian households. In July, grocery prices rose 3.1% from a year earlier.