The annual inflation rate in Canada eased to 1.7% in July 2025, from 1.9% in June and below market forecasts of 1.8%, staying beneath the BoC’s 2% mid-point for a fourth consecutive month. Gasoline prices, down 16.1% in July after a 13.4% fall in June, remained the main drag on CPI, as the removal of the consumer carbon levy in April kept weighing on energy costs. Excluding gas, prices rose 2.5%, matching the pace in May and June. Meanwhile, higher grocery costs and a smaller decline in natural gas tempered the slowdown. Both food and shelter costs picked up pace, rising 3.3% and 3%, respectively, compared with 2.9% each in June. The trimmed-mean core CPI, which is closely followed by the BoC for underlying inflation, remained at 3% in July, unchanged for the third straight month. On a monthly basis, the CPI rose by 0.3% in July, after a 0.1% increase in June and matching market estimates.