Annual inflation rate jumped to 3.0% in July, highest reading since 2011

Canada's inflation rate rises to 3%, highest level since 2011

Canada's inflation rate rises to 3%, highest level since 2011

The inflation rate rose in every province in July, according to Statistics Canada. Second-quarter GDP figures are set to be released August 30.

Statistics Canada says the country's annual inflation rating in July jumped to its highest reading since September 2011.

The Canadian dollar averaged 76.45 cents U.S., up 0.42 of a USA cent.

The annual inflation in the province was 2.7 per cent in June.

It went up 2.5 percent in June, which was already the highest level in more than six years.

Money markets expect the central bank to hike its benchmark interest rate, which sits at 1.50 per cent, once more by December.

The Bank of Canada can use interest rate hikes as a tool to help prevent inflation from climbing too high.

This one month number hasn't made a trend, says Benjamin Reitzes, Canadian rates and macro strategist at the Bank of Montreal, and core inflation remains stable.

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"If we're getting a little more pleasant talk or pleasant surprises in terms of cooler heads coming to the table to discuss the trade positions a little more rationally, I think that's certainly a positive thing and the markets should take it as such".

"The overall backdrop for inflation hasn't changed all that much".

Inflation figures released Friday shows gasoline prices were up 25.4 per cent for consumers and airfare climbed 28.2 per cent compared to a year ago.

All eight major components of the consumer price index rose on a year-over-year basis in July with the transportation index being the largest contributor with an 8.1 per cent increase.

Food purchased from restaurants also gained 4.4%, while mortgage interest costs rose 5.2%.

On the flip side, natural gas prices have declined by 5.7 per cent in the past year, and the price of telephone services has declined by 5.1 per cent.

The costs in Canada of buying passenger vehicles, auto insurance, food, telephone services, air transportation and travel tours were also up, said the government statistical agency.

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