Canada’s inflation rate spikes to a near 40-year high

Representative image of Canada’s rising inflation. Image credit: Pixaby

Ottawa/CMEDIA: With increase in Canadian consumer prices in May at rates not seen since January 1983, Canada’s annual inflation rate accelerated to 7.7 percent in May, crossing April’s 6.8 percent, data from Statistics Canada showed.

Inflation has now been above the Bank of Canada’s 2 percent target for 15 months.

Largely driven by pricey gasoline, official data showed on Wednesday, putting pressure on the central bank to hike rates “more forcefully.”

The Bank of Canada raised interest rates to 1.5 percent from 1.0 percent this month and said it was ready to act “more forcefully” if needed to combat inflation.

Canadian prices rose more in May than in April in every province, led by higher gasoline prices and higher services costs. Excluding gasoline, the annual rate rose 6.3 percent up from 5.8 percent in April, Statscan said.

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