The consumer price index increased three per cent from July 2025, compared with 2.8 per cent in June, as renewed hostilities between the U.S. and Iran caused gasoline prices to jump, Statistics Canada reported. Excluding gasoline, the index was 2.2 per higher on the year, the same as the previous month. (The Logic)

Talking point: Headline inflation in Canada—and everywhere else in the world—will be dictated by events in the Middle East until the U.S., Israel and Iran stop their attacks and the Strait of Hormuz reopens to regular traffic. Otherwise, Canadian price pressures are fairly muted, as even grocery prices are rising roughly in line with the headline rate. The Bank of Canada’s preferred measures of core inflation continue to hover around two per cent, the central bank’s target, suggesting governor Tiff Macklem needn’t raise interest rates to counter inflation that is testing the outer limits of his comfort zone.  

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