Canadian Inflation Holds at 3%

The headline inflation rate in Canada was unchanged from the previous month at 3.0% in August of 2026, aligned with market expectations and remaining below the post-Iran-war peak of 3.2%. Price growth remained dominated by energy goods as the war in the Middle East halted a key source of global oil supply. Gasoline inflation stood at 22.8% in the month, slowing slightly from the 25.7% increase in the previous month. Conversely, groceries prices rose 2.8% from the 3.1% increase in July, falling below the headline inflation rate for the first time in over two years. Core inflation rates that are tracked by the Bank of Canada remained close to their target. The trimmed-mean core rate and the median core rate were both unchanged at 1.9% and 2%, respectively, aligned with expectations. From the previous month, the Canadian CPI inched down by 0.1%.

The headline inflation rate in Canada inched higher to 3% in July of 2026 from 2.8% in the previous month, slightly above market expectations of 2.9%, but remaining below the post-Iran-war peak of 3.2% from two months prior. Gasoline price inflation accelerated to 25.7% from 20.5% in the previous month, tracking wholesale oil and refined product markets globally as strikes between Iran and the US reignited in the period and triggered blockades on tankers in the key region. In turn, core inflation rates tracked by the Bank of Canada inched slightly higher, with the median core rate up at 2% and the trimmed-mean rate at 1.9%. Upward pressure was noted from travel tours (15.2% vs 6.8%) amid higher prices for flights and accommodation due to the FIFA World Cup taking place in North America. Still, prices eased for food (3.0% vs 3.5) and shelter (1.3% vs 1.5%). From the previous month, consumer prices rose by 0.5%, rebounding from the 0.4% drop in the earlier period.

The headline inflation rate in Canada fell to 2.8% in June of 2026 from the over-two-year high of 3.2% in the previous month, slightly under market expectations of 2.9%. The drop was consistent with a slower surge in prices of gasoline (20.5% vs 33.2% in May), trimming inflation for overall transportation (6.7% vs 9.0%), as the momentary restoration of energy exports from the Middle East had eased wholesale fuel prices. Price growth also eased for food (3.5% vs 3.8%) amid softer inflation in grocery stores. Meanwhile, the median core (1.9% vs 2.1%) and the trimmed-mean (1.8% vs 2%), both key core rates tracked by the BoC, fell more than expected to their lowest in over five years. Inflation fell for shelter (1.5% vs 1.7%) and health and personal care (2.5% vs 2.7%), while prices dropped for household operations, furnishings, and equipment (-0.2% vs -0.2%). From the previous month, the Canadian CPI fell by 0.4% amid a 10.2% drop in gasoline prices.