Canadian inflation climbed to 3.0 per cent in July from 2.8 per cent in June, moving further above the Bank of Canada's 2 per cent target. The central bank attributes most of that gap to gasoline prices tied to the Middle East conflict, with inflation excluding fuel running closer to 2.2 per cent. Markets still price roughly 99 per cent odds the Bank holds its rate at 2.25 per cent at its September 2 decision, treating the increase as an external cost shock rather than domestic demand pressure.
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Employment fell in four of the twelve months shown and averaged a gain of about 18,000 a month, so the August loss stands out within a mostly positive year.
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A year earlier the relationship ran the other way, with headline inflation sitting about a point below the CPI-trim core measure.
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The Bank of Canada is widely expected to hold its policy rate at 2.25% today, a seventh straight hold.
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Core inflation has returned to roughly the Bank of Canada's 2% target, the mirror image of August 2025 when headline inflation was the lower reading.
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