Mortgage-interest costs are driving Canadian inflation, says Statistics Canada.

The mortgage-interest cost index rose a record 30.6 per cent year-over-year in July and remained the largest contributor to total inflation, the federal agency said in its monthly consumer price index report. The increase was the fifth in the past five months, following a 30.1-per-cent climb in June.

Excluding mortgages, overall inflation increased 2.4 per cent in July.

Analysts have expressed different views on how mortgage-interest cost increases could influence the Bank of Canada’s upcoming policy-interest-rate. The BoC is scheduled to make its next policy-rate announcement in September.

Overall inflation climbed 3.3 per cent in July, up 50 basis points from 2.8 per cent in June. StatCan attributed the rise mainly to a more modest year-over-year decline in gasoline prices after they fell 9.2 per cent in July 2022 from 2021.