New data released by Statistics Canada showed that the annual inflation rate rose to 1.9% last June, compared to 1.8% in May, driven mainly by the accelerated increase in prices of new and used cars.

According to the report, the rise in vehicle prices contributed the most to the index increase, as experts attributed this rise to the continued supply chain disruptions, increased shipping costs, and growing demand with the improvement of some economic indicators.

Key influencing factors:

• New and used cars: Their prices rose significantly, becoming one of the main contributors to the overall inflation rate.

• Rents: Prices in the housing sector continued to register moderate increases.

• Food: The pace of increase remained lower than the rates recorded last year.

Analysts at CIBC Bank said that this increase came almost in line with expectations, but continued pressure on vehicle prices may keep inflation above the 2% target levels of the Bank of Canada in the coming months.

For his part, the Governor of the Bank of Canada, Tiff Macklem, explained last week that the bank is closely monitoring developments, noting that the upcoming interest rate decision at the end of July will take these new indicators into account.

In the near horizon:

Economists expect inflation to stabilize within a range between 1.8% and 2.2% during the summer, especially with the decline in energy prices compared to the peak of last year, but pressures in the car and rent sectors may keep the pace of increase relatively high.