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Inflation rate jumps again to new 18-year high of 4.7%

Canada’s inflation rate jumped to a new 18-year high of 4.7 per cent last month, led by sharply higher prices for energy.

Statistics Canada said in its report released Wednesday that the 4.7 per cent rate is the highest since February 2003.

The showing was in line with what economists were expecting. All eight components that the data agency tracks were higher, but the increase was led by higher transportation costs, which went up by more than 10 per cent in the past year.

Economist Ksenia Bushmeneva with TD Bank says consumers would be well advised to expect higher prices to stick around. 

“Supply disruptions remain acute and continue to impact a broad range of items,” she said. “Energy prices remain a major contributor, but consumers are feeling the pinch seemingly everywhere: at grocery and clothing stores, car dealerships and at home.”

Labour shortages in some sectors and pent-up demand from consumers who were able to save more during pandemic restrictions are also playing a part, economists say.

Food prices continued to creep higher, per the report. Meat prices have risen by almost 10 per cent, on average, with bacon going up at more than twice that rate. Overall, Canadians grocery bills are going up at a 3.9 per cent annual pace.

Economist Doug Porter with Bank of Montreal noted that gasoline prices were stable compared to September, but “just as pump prices may be stabilizing, other necessities are grabbing at the baton.”

“While perhaps not quite as eye-popping as the latest 6.2 per cent U.S. headline inflation [report] this still marks a massive upswing from inflation of just 0.7 per cent a year ago,” Porter said.

And it’s not just a North American phenomenon. Inflation in Britain, it was reported Wednesday, hit a 10-year high. Inflation there was 4.2 per cent in October, after a 3.1 per cent tally in September.
Read more for a chart that breaks down rising costs per expenditure type
Patricia Dent
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