OTTAWA - The inflation rate in Canada increased to 1.9% in August, according to Statistics Canada. This rise was influenced by a 1.4% month-over-month increase in gasoline prices. Higher refining margins countered the effects of lower crude oil costs.

Despite the monthly increase, gasoline prices were down 12.7% compared to the same time last year. The decline in gas prices has been attributed to the end of the consumer carbon price, which has lowered costs for drivers since spring. However, this annual decrease was less than the 16.1% drop recorded in July, contributing to the uptick in the overall inflation rate.

Economists had anticipated a rise in inflation to around 2%, up from 1.7% in July. When excluding gasoline prices, the inflation rate stood at 2.4% in August, a slight decrease from the previous three months.

Grocery prices showed mixed results last month. Overall, grocery costs rose 3.5% annually in August, a slight increase from July. Notably, meat prices surged, with an annual increase of 7.2%, driven by a 12.7% rise in the cost of fresh and frozen beef. In contrast, fresh fruit prices fell by 1.1%, reversing a 3.9% gain in July, primarily due to lower prices for grapes and cherries.

Rising rents and mortgage interest rates continue to be significant contributors to the annual inflation rate. Additionally, fewer back-to-school promotions for cellphone plans led to an increase in cellular service prices in August.

On the travel front, a decline in Canadian demand for trips to the United States resulted in a 9.3% decrease in travel tour prices compared to the previous year.

The Bank of Canada is expected to review these new inflation figures before making its interest rate decision. Many economists predict that the central bank may implement a quarter-point cut in its upcoming meeting.