OTTAWA, Oct 19 — Inflation in Canada continued its steady decline in September from a June peak, led by cheaper gasoline, the government statistics agency said today.
However, it noted that “Canadians continued to feel the pinch from higher food prices,” which rose at their fastest pace in more than four decades.
Year-over-year inflation decelerated 0.1 percentage points to 6.9 per cent in September from the previous month, after reaching a high of 8.1 per cent in June.
Analysts had been hoping for bigger price drops after the Bank of Canada hiked its key lending rate five times in recent months to try to throttle the economy and hit its 2.0 per cent inflation target.
“The persistence of inflation will have the Bank of Canada hiking rates further,” by as much as 50 to 75 basis points before the year’s end, Desjardins analyst Royce Mendes said in a research note.
The central bank’s next announcement is scheduled for October 26.
On a monthly basis, Canadian gasoline prices fell for a third consecutive month in September, amid increased global supplies of crude oil. But prices at the pump were still up 13 per cent from a year earlier.
Prices for meat, diary, bakery products, fruits and vegetables, and other food items have been rising sharply over the past 10 months.
Statistics Canada cited factors such as unfavourable weather, higher costs of inputs including fertilizer and natural gas, as well as “geopolitical instability stemming from Russia’s invasion of Ukraine.”
Despite a cooling housing market, buying a home in Canada still cost more in September. Rents rose too, along with prices for furniture and passenger vehicles, and tuition fees.
Video equipment and digital devices, as well as telephone services and child care, meanwhile, cost less. — AFP
