Canada’s inflation rate hit 5.1 per cent in January, its highest level since 1991.
Statistics Canada reported Wednesday that if volatile items, like food and energy, are stripped out of the numbers, the cost of living went up at a pace of 4.3 per cent. But even that toned-down figure is the highest dating back to 1999.
Grocery bills continue to rise quickly, with the price of food purchased at stores up 6.5 per cent in the year leading up to January. That’s the fastest pace since 2009.
“Increasing grocery bills is likely a trend that continued into February, with protests blocking key trade arteries for food,” said economist Royce Mendes, with financial services conglomerate Desjardins.
The cost of keeping a roof over your head also continues its ascent, as shelter costs rose by 6.2 per cent in the past year. That’s the fastest increase since 1990.
Gasoline prices increased by 4.8 per cent during the month, and are now 31 per cent higher than they were this time last year.
“With energy prices continuing to rise, inflation is set to accelerate even further and is unlikely to materially slow down before April,” Mendes said.
By then, Canada’s central bank is expected to have raised its benchmark interest rate slightly higher, the first of many moves aimed at reining in runaway inflation.
Canada is not the only country grappling with high inflation. Supply-chain imbalances caused by the pandemic, coupled with record amounts of stimulus spending, have combined to push up inflation just about everywhere. The U.S. inflation rate hit 7.5 per cent in January — its highest level in 40 years.
While economists had been expecting Canada’s rate to be high, the 5.1 per cent rate was higher than the 4.8 per cent figure that a consensus of those polled by Bloomberg had been expecting.
CBC/MS
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