<div id="readability-page-1"><div><p>(MT Newswires) -- Canadian gasoline prices have climbed above year-earlier levels in recent days, Bank of Montreal said.</p><p> United States pump prices are now almost even with a year ago and slightly higher when converted to Canadian dollars, but the removal of Canada's consumer carbon tax at the start of April should have kept domestic prices lower, the bank noted.</p><p> The gap between the U.S. and Canadian prices widened sharply after the tax was cut and has since narrowed.</p><p> This trend could have major implications for headline inflation in the months ahead, BMO said. It is unlikely to weigh heavily on Tuesday's August consumer price index reading, but the bank expects a &#34;pop&#34; in next month's data.</p><p> The yearly change in gasoline prices has gone from -18% in April, to -16% in July, to about -11.5% in August, to now positive, it added.</p><p>This factor alone could boost overall inflation by more than half a point from its recent sub-2% pace, according to BMO.</p></div></div>

<p>BMO reports that Canadian gasoline prices have recently surpassed year-ago levels, which may impact inflation. U.S. prices are nearly equal to last year, but the removal of Canada's consumer carbon tax in April was expected to keep prices lower. The widening gap between U.S. and Canadian prices has narrowed since the tax cut. BMO anticipates a significant rise in inflation due to gasoline price changes, projecting an increase of over half a point from the current sub-2% rate, although it may not affect the August consumer price index significantly.</p>

BMO Sees Canadian Gasoline Prices Turning Positive, Poised to Lift Inflation