Canada’s annual inflation rate remained stable at three percent in August, according to Statistics Canada. The slight easing of gasoline and food prices last month was offset by an increase in prices for tours and travel. Shelter costs, including rents and mortgage payments, also saw a slight uptick in August.
Consumer prices experienced a 0.1 percent decrease on a monthly basis in August. Economists surveyed by Reuters had anticipated that annual inflation would hold steady at three percent. The latest consumer price index data does not reflect the recent surge in crude oil prices due to escalating tensions in the Middle East. Average regular gasoline prices nationwide have risen by approximately 21 percent year-over-year.
Economist Benjamin Reitzes from the Bank of Montreal predicts that the rise in gas prices will contribute to increased inflation in September. On the other hand, RBC economist Abbey Xu suggests that there is not yet significant evidence indicating that higher energy costs are causing price hikes in other sectors of the economy.
Reitzes noted a 0.2 percent monthly decline in food prices in August, driven by lower prices of fresh fruits and vegetables. However, he foresees that the higher fuel costs will likely lead to increased grocery prices in the upcoming months.
Both Reitzes and Xu agree that the recent data from Statistics Canada aligns with their expectation that the Bank of Canada will maintain its current interest rates in the near future. Reitzes emphasized that the current data does not suggest a rate hike by the Bank of Canada, despite concerns about rising oil prices.