Higher gas prices push Canada’s inflation rate to 1.2% in July

OTTAWA – Canadian inflation picked up its pace last month for the first time since January as the annualized rate rose to 1.2 per cent.

Statistics Canada‘s latest inflation number was up from one per cent in June – which had represented the data point’s lowest mark in almost two years.

The agency says the higher price of gasoline, up 4.6 per cent in July compared to a year earlier, was among the biggest contributors behind the increase.

Higher fuel prices were partly offset by lower electricity prices, due in large part to legislated price declines in Ontario.

July marked the first time the annual inflation rate went up since a peak in January at 2.1 per cent – close to the Bank of Canada’s ideal target of 2.0 per cent.

Some experts had pointed to weak inflation as a reason for the central bank to hold off hiking its interest rate – but bank argued the recent softness was mostly temporary and raised its key rate slightly last month.