Canada inflation 2.8pc in August

Canadians paid 2.8 percent more for goods and services in August than a year earlier, with prices rising across the board, official data released Friday showed.

Inflation was only a tick higher than analysts had forecast, after the consumer price index soared to 3.0 percent the previous month.

Statistics Canada said the price of gasoline -- the main contributor -- was up nearly 20 percent year over year.

Water, electricity and other fuels, as well as travel tours and airline tickets, and passenger vehicles also cost more in the month, the government statistical agency said.

But most prices rose at a slower pace than in July.

Economists expect the Bank of Canada to hike its key lending rate in October in order to temper inflation as the economy hovers at near capacity.

But the central bank has wavered due to uncertainty over the future of a crucial continental trade pact with the United States and Mexico.

The bank increased interest rates in July by 25 basis points, after a previous hike in January -- bringing rates to the highest level in a decade.

"While (the economic data) is not screaming for rate hikes, it gives the bank comfort to hike in October even if GDP growth slows a little from Q2's pace," commented CIBC Economics analyst Andrew Grantham in a research note.