{"id":191257,"date":"2026-09-01T16:52:25","date_gmt":"2026-09-01T16:52:25","guid":{"rendered":"https:\/\/www.europesays.com\/canada\/191257\/"},"modified":"2026-09-01T16:52:25","modified_gmt":"2026-09-01T16:52:25","slug":"canadas-inflation-jumps-to-3-on-surging-gas-prices-but-the-bank-of-canada-is-expected-to-hold-rates-steady","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/canada\/191257\/","title":{"rendered":"Canada’s inflation jumps to 3% on surging gas prices, but the Bank of Canada is expected to hold rates steady"},"content":{"rendered":"

\"Photo<\/a> Photo of a Calgary gas station with high gas price <\/p>\n

Rising energy costs and travel expenses pushed Canada’s annual inflation rate up to 3.0% in July, putting central bank policymakers in a challenging position ahead of their interest rate decision on Wednesday. <\/p>\n

The acceleration from June’s 2.8% rate brings headline inflation to the very top of the central bank’s target range of 1% to 3%. <\/p>\n

Despite the uptick in overall consumer prices, economists widely expect the Bank of Canada<\/a> to keep its benchmark overnight rate steady at 2.25% in its Sept. 2 announcement. <\/p>\n

Don’t Miss Gasoline and travel drive the headline increase <\/p>\n

Higher gasoline prices served as the primary driver behind the July inflation increase. Pump prices jumped 25.7% year over year in July following a 20.5% gain in June, fueled by ongoing global energy market volatility and the conflict in the Middle East. <\/p>\n

Special event demand also put upward pressure on the service sector. High airfares and accommodation rates linked to summer travel and international events boosted travel prices by 15.2% compared with the same period last year. <\/p>\n

Offsetting some of those increases, food price growth at grocery stores slowed to 3.1% in July from 3.9% in June, while shelter inflation continued to ease, rising just 1.3% year over year. <\/p>\n

Read more: 3 essential money moves to make once you’ve saved $50,000<\/a> <\/p>\n

Core inflation holds near 2% target <\/p>\n

Central bank officials closely monitor core inflation metrics, which strip out volatile components like gasoline, to gauge underlying price pressures in the economy. <\/p>\n

The central bank’s preferred measures of core inflation, CPI-median and CPI-trim, averaged 2.0% in July. Excluding gasoline, broader inflation stood at 2.2%. <\/p>\n

Because core inflation remains anchored at the 2% midpoint target, policymakers have little immediate pressure to raise interest rates, while trade uncertainty acts as a buffer against further rate cuts. <\/p>\n

Economic slack and trade tensions limit policy options <\/p>\n

The central bank finds itself weighing persistent energy inflation against economic headwinds and trade uncertainty with the United States. <\/p>\n

Economic growth stalled over the past year as businesses adjusted to shifting trade policies, slower population growth and soft labour market conditions. Canada’s unemployment rate held at 6.5% in June, reflecting continued slack across the economy. <\/p>\n

With underlying price pressures contained and economic activity recovering gradually<\/a>, policymakers are expected to hold rates unchanged on Wednesday while keeping a close watch on international energy markets and trade developments heading into the fall. <\/p>\n

What To Read Next <\/p>\n

The most expensive financial mistakes are often the ones you don’t see coming. Join 19,000+ Canadians who get the money moves, risks and opportunities shaping their finances \u2014 delivered free each week. Subscribe now.<\/a> <\/p>\n

This article originally appeared on Money.ca<\/a> under the title: Canada’s inflation jumps to 3% on surging gas prices, but the Bank of Canada is expected to hold rates steady<\/a> <\/p>\n

This article provides information only and should not be construed as advice. It is provided without warranty of any kind. <\/p>\n","protected":false},"excerpt":{"rendered":"Photo of a Calgary gas station with high gas price Rising energy costs and travel expenses pushed Canada’s…\n","protected":false},"author":2,"featured_media":191258,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[17,817,34818,27475,7704],"class_list":["post-191257","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-canada","tag-canadians","tag-july","tag-june","tag-robert-kiyosaki"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/191257","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/comments?post=191257"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/191257\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media\/191258"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media?parent=191257"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/categories?post=191257"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/tags?post=191257"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}