Annual inflation rate jumped to 3.0% in July: StatsCan

Annual inflation rate jumped to 3.0% in July: StatsCan

The October crude contract closed up 33 cents at US$65.21 per barrel and the September natural gas contract ended up four cents at US$2.95 per mmBTU.

The inflation rate rose in every province in July, according to Statistics Canada.

The central bank hiked its benchmark rate to 1.5 percent in July - its highest level in a decade, following a previous rate increase in January.

Statistics Canada released its Consumer Price Index for July 2018 on Friday and said that the national inflation rate has gone up by three percent, following a 2.5 percent increase in June 2018.

The Bank of Canada can raise interest rates to help prevent inflation from climbing too high.

Canada's annual inflation rate in July hit its highest level in almost seven years as gasoline prices and the cost of air transportation pushed prices higher.

Price increases for a basket of items consulted by the Bank of Canada in setting its key lending rate remained at 2.0 percent - the bank's target inflation rate - which CIBC Economics analyst said happened "somewhat surprisingly".

"If we're getting a little more pleasant talk or pleasant surprises in terms of cooler heads coming to the table to discuss the trade positions a little more rationally, I think that's certainly a positive thing and the markets should take it as such".

A 25.4 per cent increase in the price of gasoline and a 28.2 per cent increase in the cost of air transportation compared with a year ago helped push overall prices higher.

The rates of all eight components rose on a year-on-year basis in July. I n a separate report, Statistics Canada estimated the direct impact of tariffs on USA imports implemented earlier this year on the consumer price index to be up to 0.07 percentage points.

And recent interest rate hikes pushed up mortgage rate costs.