Canada Inflation Slows More than Expected

The headline inflation rate in Canada fell to 2.8% in June of 2026 from the over-two-year high of 3.2% in the previous month, slightly under market expectations of 2.9%.

The drop was consistent with a slower surge in prices of gasoline (20.5% vs 33.2% in May), trimming inflation for overall transportation (6.7% vs 9.0%), as the momentary restoration of energy exports from the Middle East had eased wholesale fuel prices.

Price growth also eased for food (3.5% vs 3.8%) amid softer inflation in grocery stores.

Meanwhile, the median core (1.9% vs 2.1%) and the trimmed-mean (1.8% vs 2%), both key core rates tracked by the BoC, fell more than expected to their lowest in over five years.

Inflation fell for shelter (1.5% vs 1.7%) and health and personal care (2.5% vs 2.7%), while prices dropped for household operations, furnishings, and equipment (-0.2% vs -0.2%).

From the previous month, the Canadian CPI fell by 0.4% amid a 10.2% drop in gasoline prices.

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