The annual inflation rate in Canada rose to 1.9% in June of 2025 from 1.7% in the previous month, aligned with market expectations. Despite the pickup, the rate remained below the Bank of Canada's mid-point target of 2% for the third straight month, consistent with the central bank's forecast that price growth should rise as tariffs and supply-disruptions may threaten material shortages. Deflation slowed sharply for fuel (-13.4% vs -15.5% in May) due to base effects, driving similar developments in overall transportation costs (-0.6% vs -1.4%). Durable goods also lifted the inflation rate, with prices accelerating for passenger vehicles (5.2% vs 4.9%) and furniture (3.3% vs 0.1%). In turn, inflation slowed for food (2.9% vs 3.4%) amid softer price growth for groceries, and shelter (2.9% vs 3%). The trimmed-mean core CPI, which the BoC uses as its main gauge for underlying inflation, was unchanged at 3% as expected.