Canada’s annual inflation rate remained unchanged at 3% in August, the same level reported in July, according to the latest consumer price index released by Statistics Canada on Monday. The data shows a modest slowdown in food price growth and a slight easing of gasoline price increases, even as benchmark Brent crude stayed above $100 per barrel.
Key figures
On a month‑to‑month basis, the overall CPI fell 0.1%. Gasoline prices, while still rising at an annual rate of 22.8%, decelerated from a 25.7% increase in July. Food prices, which have been outpacing headline inflation since July, grew at an annual rate of 2.8% – the first time in 14 months that food inflation fell below the 3% mark.
Dairy costs led the food‑price slowdown, rising just 0.7% year‑over‑year in August compared with a 3.1% rise in July. Cheese and yogurt were the primary contributors to the reduced dairy price pressure.
Other price trends
Travel‑related costs surged 26.1% in August, driven largely by a base‑year effect, after a decline in the same category the previous year when fewer Canadians traveled to the United States. Core inflation measures remained stable, with the CPI‑median at 2% and the CPI‑trim at 1.9%, both unchanged from July.
Shelter costs, which include rents and mortgage interest, ticked up slightly to 1.5% in August from 1.3% in July.
Policy context
The Bank of Canada reiterated its commitment to keep inflation near the midpoint of its 1%‑to‑3% target range and warned it would not hesitate to raise rates further if inflation pressures persist. The central bank’s stance aligns with broader North American efforts to manage price stability amid high energy costs.
President Trump’s administration recently imposed a 50% tariff on certain Canadian imports, prompting Canada to consider retaliatory measures. Both actions are expected to influence cost dynamics for the full month, though the current data suggest that inflationary pressures are holding steady.
Market reaction
Following the release, the Canadian dollar slipped, trading down 0.29% at C$1.3909 per U.S. dollar (71.90 U.S. cents). Canadian two‑year government bond yields rose 1.4 basis points to 2.703%.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
