Canada August Inflation Rises 1.9% as Gasoline Decline Slows Ahead of BoC Decision

08:56 AM EDT, 09/16/2025 (MT Newswires) -- Canada's consumer price index rose 1.9% year over year in August, up from a 1.7% increase in July, Statistics Canada said Tuesday, a day before the Bank of Canada is scheduled to set policy.

August's CPI reading was slightly below the 2.0% consensus estimate from MUFG.

The central bank focuses on inflation when setting interest rates, and most analysts expect a 25-basis-point rate cut Wednesday.

Gasoline prices fell 12.7% from a year earlier, a smaller drop than July's 16.1% decline, helping lift headline inflation, Statistics Canada said. Excluding gasoline, the CPI rose 2.4%, after three straight months of 2.5% increases.

Offsetting some of the accelerations were lower prices for travel tours and fresh fruit compared with July. The overall CPI fell 0.1% month over month, but rose 0.2% on a seasonally adjusted basis.

Travel-tour prices dropped 9.3% annually in August after a 1.7% decline in July, as demand for U.S. destinations softened amid trade tensions. Traveler-accommodation prices climbed 2.9%, reversing July's 2.7% drop, led by gains of 16.1% in Nova Scotia and 30.9% in Newfoundland and Labrador, which hosted the Canada Summer Games. Air-transportation prices fell 7.6%, a smaller decline than July's 10.6%.

Statistics Canada's monthly and quarterly CPI reports track prices paid by consumers for a basket of goods and services such as food, energy, vehicles, medical care, apparel, and housing. The core CPI, which excludes food and energy due to their volatility, is closely watched by markets and the Bank of Canada as an indicator of underlying inflation pressures.

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