Canada inflation soars to four-decade high

Canada’s rate of inflation continued to soar in June, hitting a four-decade high of 8.1 percent as sky-scraping gasoline led a broad increase in prices, the government statistical agency said  on Wednesday.

Analysts had been expecting worse, after a 7.7 percent jump in prices the previous month, while the data suggested inflation — at its highest level since January 1983 — may have peaked.

“Inflation continues to heat up, but not to temperatures analysts had expected,” Desjardins analyst Royce Mendes said in a research note.

This slightly weaker-than-anticipated reading “will come as good news for central bankers trying to control price pressures,” he added.

According to Statistics Canada, the cost to fill up cars and trucks went up 54.6 percent in the 12 months to June.

But in recent weeks, record gasoline prices have come down as crude oil tumbled.

The cost of purchasing a passenger vehicle in the month also rose, with demand outpacing supply as a result of the ongoing semiconductor chip shortage.

The lifting of most pandemic restrictions has also fueled an increase in tourism, with the return of sporting events, festivals and other large in-person gatherings leading to higher demand — and costs — for airfare, hotel rooms and restaurant meals.

Meanwhile, the costs of childcare, computer equipment and mortgage interest fell.

A red-hot housing market also cooled slightly, leading to lower real estate commissions.  (AFP)