Inflation in Canada once once more accelerated in April compared to a year ago, standing at 6.8% mainly due to higher food and housing prices, the official said on Wednesday. National Institute of Statistics.
This “slight increase compared to March (+6.7%)” constitutes the highest level ever seen since 1991, according to Statistics Canada.
Analysts predict that the prices of goods and services will continue to rise, as the central bank prepares to raise its key rate once more to counter inflation.
“What has gone up is still not down in Canadian inflation, and that may not be happening anytime soon,” Desjardins economist Royce Mendes said in a note.
‘Today’s data will only reinforce bets that we should expect a back-to-back 50bp (bps) rise for June and July,’ he continued, referring at the Bank of Canada’s next rate announcement on June 1.
Since mid-April, the central bank’s key rate has been at 1%. It has long been at the floor level of 0.25% during the pandemic, in particular from December 2020 to January 2022.
Wage pressure
Statistics Canada said Russia’s invasion of Ukraine in late February was a major contributor to higher prices for gasoline, commodities and ‘especially’ food.
‘Excluding gasoline, the consumer price index rose 5.8% year over year in April, following posting a 5.5% increase in March,’ explained the national institute in a press release.
Rising energy prices have also pushed up housing costs amid a fiery real estate market that is only just beginning to show signs of slowing down.
The strength of the Canadian labor market has also exerted upward pressure on the prices of all goods and services, which have exceeded wage increases and thus resulted in a loss of purchasing power for Canadians.
/ATS