StatCan report says gas price rebound drove inflation up 3 per cent in July

Statistics Canada says the annual rate of inflation accelerated to 3 per cent in July, as renewed hostilities in the Middle East drove gas prices higher again.

The national agency says the Consumer Price Index rose 3 per cent year over year last month, following a 2.8 per cent gain in June.

Canadian drivers found relief at the gas pumps in June as peace talks in the Iran war progressed and reigned in global oil prices, but economists say progress-taming inflation likely reversed course last month, as renewed hostilities in the Middle East spiked gas prices again.

StatCan says consumers were also paying more for airfares and travel tours last month as the energy shock made jet fuel more expensive and the FIFA World Cup drove up demand to U.S. destinations.

READ MORE: StatCan reports Canada added 75K jobs in July

Air transportation prices rose 12 per cent year over year in July, following a 9.6 increase in June, with higher jet fuel costs as a contributing factor.

Canadians found some relief in the grocery aisles as annual price hikes on food bought from the store cooled sharply to 3.1 per cent in July from 3.9 per cent previously.

StatCan says price pressures were easing on fresh vegetables and chicken products but costs for fresh fruit were rising faster than in June.

Regionally, every province except for Ontario saw prices rising at a faster pace in July compared with June.

The July inflation figures mark the Bank of Canada’s last look at price data before its next interest rate decision on Sept. 2.

With files from The Canadian Press.

READ MORE: StatCan reports Canada’s economy expanded by 0.3% in May