Canada’s Inflation Slows to 1.7% in July as Fuel Costs Fall, Core Pressures Hold
Statistics Canada reported that annual consumer inflation slowed to 1.7 percent in July 2025, down from 1.9 percent in June.
The decline was driven mainly by a 16.1 percent year-over-year drop in gasoline prices, following weaker global oil markets, higher supply, and the removal of a federal carbon levy.
Excluding gasoline, prices rose 2.5 percent, unchanged from the prior two months. Food prices increased 3.3 percent, while shelter costs advanced 3 percent, marking their first acceleration since early 2024.
Core inflation measures showed slight relief. The three-month average eased to 2.4 percent, the lowest since September 2024, but still close to the Bank of Canada’s 2 percent target ceiling.
Roughly 37 percent of the consumer basket continues to show inflation above 3 percent. Markets reacted by raising expectations that the central bank may deliver a quarter-point rate cut in September.
The Canadian dollar weakened and two-year government bond yields declined on the news. While lower fuel costs offered relief to consumers, persistent shelter and food pressures underline ongoing challenges for monetary policy.
The data suggest that Canada’s inflation battle is not fully resolved, even as headline figures show progress.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief