Canada’s annual inflation rate rose to 3.3 percent in July, mostly because of higher gas prices, marking an increase in the pace of price growth since June.

The latest cost of living index comes after annual inflation fell to 2.8 percent in June in the Bank of Canada’s target range for the first time since March 2021.

Meantime, the cost of groceries continues to go up, rising 8.5 percent on an annual basis, a bit more slowly than in June, largely due to smaller price increases for fruit and bakery goods.

Doug Porter is chief economist at Bank of Montreal and says slightly higher inflation in July is not going to make much of a difference to the central bank’s plans

The Bank of Canada’s latest projections show it expects inflation to hover around 3.0 percent for much of the next year before gradually falling back to two per cent by mid-2025.

Tuesday’s release is the final inflation report ahead of the central bank’s next interest rate decision.

They key lending rate currently sits at 5.25 percent.