Canada's Inflation Rate Accelerates, Bets Increase for Rate Hike

Canada's Inflation Rate Accelerates, Bets Increase for Rate Hike

By: Tomas Ronolski - News

Friday, September 22, 2023

In August, Canada’s consumer price index (CPI) rose by 4 percent year over year and at the fastest pace since April. For the month, CPI rose 0.4 percent, double what economists had anticipated, but less than in July.

Core inflation rates increased, averaging 4 percent in August, up from an upwardly revised 3.75 percent in July, exceeded expectations of 3.7 percent. Shelter prices in August increased 6.0 percent after a 5.1 percent advance in July, pushed up in part by rising rents and higher interest rates. Rent prices rose across eight provinces, those with the fastest price growth were Newfoundland and Labrador, Alberta, Nova Scotia and Manitoba.

Higher gasoline prices also pressured the headline rate for the annual jump. Excluding gasoline, the CPI rose 4.1 percent in August, the same as July. The surprising jump pushed bets for a rate hike at the next Bank of Canada meeting up to 42 percent.

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