3% inflation rate is the largest recorded since 2011.
Canada’s annual inflation rate hit 3% in July, a level that hasn’t been matched in the past 7 years.
Inflation increased from 2.5% in June to 3% in July, contrary to economists expectations of a steady rate.
A key driver of the inflation rate surge were gas prices, which increased 0.8% in July.
As noted by Bloomberg, Canadian gas prices are up a whopping 25.4% from a year ago.
That report also noted that “There was little effect from higher tariffs on consumer prices in July. Statistics Canada released a report on the estimated impacts of Canada’s tariffs on U.S. metal and consumer products and found there would only be a small overall increase — with no more than a decimal point increase to inflation over a limited period of time.”
The rise in gas prices is an example of the cost of Canada not having true energy independence. Our consumers are far more vulnerable to swings of the world market than we should be.
In addition to the overall inflation rate increase, services prices went up 3.2%, while goods went up 2.8%. The inflation rate for services was the highest since 2008.
The rise in inflation has fueled speculation about more interest rate hikes ahead from the Bank of Canada.