August WPI inflation edges up to 9.92% as fuel prices stay elevated
Fuel and power inflation rose to 22.93 per cent, while the WPI Food Index increased to 7.05 per cent in August 2026
In August, Canada's Consumer Price Index (CPI) figures will be closely monitored, providing insights into inflation trends following the Bank of Canada's September 2 meeting. Economists anticipate the headline CPI to remain steady at 3% year-over-year and to increase by 0.3% monthly, lower than the 0.5% rise observed in July. The Bank of Canada's core measure, excluding food and energy costs, is expected to grow by 0.1%.
Despite geopolitical tensions and tariff worries, inflationary pressures are anticipated to persist. The Bank of Canada's preferred measures of underlying inflation showed an uptick in July, with CPI-Common, Trimmed Mean, and Median reaching 2.7%, 1.9%, and 2.0% respectively. The Bank of Canada's cautious stance on September 2, leaving interest rates unchanged, adds to the uncertainty.
Analysts expect nearly 36 basis points of tightening by year-end. A rise in the CPI could bolster bets for further rate hikes, strengthening the Canadian Dollar (CAD). Market participants will be watching the release of August's CPI data on Monday at 12:30 GMT, with a potential impact on USD/CAD exchange rates.
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