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That’s up from June’s inflation rate of 2.8 per cent. Economists had widely expected an increase, though the report outpaced the consensus’ estimates of 3.0 per cent.
Part of the reason inflation increased was because energy prices saw a smaller annual decline in July than in June, StatCan said. A monthly drop in gasoline prices between July and June last year is no longer affecting the agency’s inflation calculations due to the “base-year effect.”
On a monthly basis, Statistics Canada said gas prices in July were up slightly (0.9 per cent) from June.
Nova Scotia saw a 14 per cent month-t0-month jump in prices at the pump — the fastest monthly pace in Canada — which Statistics Canada said was in part tied to the introduction of the federal carbon levy in the province.
Food prices at the grocery store were meanwhile up 8.5 per cent in the month, the agency noted, but are growing at a slower rate than the 9.1 per cent seen in June. Prices for fresh fruit and bakery products helped with the slowdown, StatCan said.
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Prices for fresh fruit were up only 4.1 per cent in the month, compared to a jump of 10.5 per cent in June. That deceleration was the biggest month-to-month decline in more than 15 years the agency said, thanks to a substantial drop in the prices for grapes (down 40.9 per cent) as well as oranges (down 1.8 per cent).
Mortgage costs once again grew at a record rate thanks to the rapid rise in interest rates, StatCan said.
The Bank of Canada is hoping restrictive interest rates will tamp inflation all the way back down to its two per cent target.
July’s increase has moved the annual inflation rate out of the central bank’s one-to-three per cent target range.
More to come.
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