Canada’s inflation rate rises to 3.3% in July: report

Canada’s inflation rate rose to 3.3 per cent in July, marking an increase in the pace of price growth since June.

The July consumer price index report released Tuesday by Statistics Canada shows price growth gained pace since the previous month.

This follows a 2.8 per cent fall in June, seeing it within the Bank of Canada’s target range of between one and three per cent for the first time since March of 2021.

READ MORE: Canada’s inflation rate dropped to 2.8% in June despite high grocery prices

The Bank of Canada is expecting inflation to hover around three per cent over the next year, before steadily declining to two per cent by mid-2025.

Forecasters have predicted a higher chance of a rate hike in the next month.

Excluding energy prices, the consumer price index decelerated to 4.2 per cent, down from 4.4 per cent in June.

All the while, grocery prices rose 8.5 per cent. The federal agency says prices rose more slowly than June’s 9.1 per cent, largely due to smaller price increases for fruit and bakery goods.

WATCH MORE: Canada’s inflation rate dropped to 3.4% in May

The longer trajectory projected to return back to the inflation target prompted the interest rate raise to five per cent in July.

The central bank is hoping households facing higher housing costs due to rising interest rates to pull back on spending elsewhere and slow inflation.

The Bank of Canada is set to make its next interest rate decision on Sept. 6.

This report was created with files from the Canadian Press

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