ZCZC
BCN-14
CANADA-ECONOMY-INFLATION-INDICATOR
Canada inflation at highest point in more than six years
OTTAWA, July 21, 2018 (BSS/AFP) – Canada’s annual inflation rate rose to
2.5 percent in June, its highest level in more than six years, on the back of
higher fuel and food prices, the government said Friday.
Inflation had risen 2.2 percent in May, and the June figure was higher
than analysts had expected. It was the highest rate since early 2012, when
inflation stood at 2.5 percent in January that year, and 2.6 percent in
February.
Last week, Canada’s central bank raised the country’s benchmark interest
rate to 1.5 percent in a bid to tame rising prices. The Group of Seven
economy is seeking to keep inflation at or near a target of two percent.
The Bank of Canada forecast that inflation would settle back to two
percent “by the second half of 2019.”
The spike in prices of goods and services in June will “boost expectations
for a follow-up hike from the Bank of Canada in the near-term,” said Royce
Mendes, an economist for CIBC.
According to Statistics Canada, June inflation “reflects increases in
prices for gasoline and food purchased from restaurants, as well as
offsetting factors such as lower price inflation for electricity and
telephone services.”
“These movements coincide with recent improvements in the economy and the
labor market, as well as an increase in oil prices,” it added.
BSS/AFP/HR/1000