Canada’s inflation rate stayed steady at three percent in August, according to Statistics Canada. Gasoline and food prices saw a slight decrease last month, while expenses for tours and travel increased. Shelter costs, such as rents and mortgage payments, also rose slightly during August.
Consumer prices experienced a 0.1 percent decrease on a monthly basis. A recent Reuters survey of economists had anticipated the annual inflation rate to remain 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 national gasoline prices have risen by about 21 percent year-over-year, as reported by Kalibrate.
Economist Benjamin Reitzes from the Bank of Montreal predicts that gas prices will contribute to heightened inflation in September. On the other hand, RBC economist Abbey Xu noted that there is limited evidence suggesting that increased energy costs are leading to higher prices in other sectors of the economy.
Reitzes pointed out that the 0.2 percent monthly decline in food prices, driven by cheaper fresh produce, was unexpected. However, he foresees that the rise in fuel costs will likely impact the affordability of groceries in the near future.
Both Reitzes and Xu believe that the latest data from Statistics Canada supports their view that the Bank of Canada will maintain its current stance in the short term. Reitzes mentioned that the current data does not indicate any imminent rate hikes by the Bank of Canada, despite concerns about rising oil prices.
