The annual rate of inflation picked up again in August, rising to four per cent, according to Statistics Canada.
Economists had largely expected the increase, as gasoline prices pushed inflation higher.
Statistics Canada attributed some of the inflation at the pumps to the base-year effect — the impact of unfavourable year-over-year trends — as gas prices rose last month but were decelerating from last summer’s peaks in August 2022.
There was more relief at the grocery store in August, however, with prices down 0.4 per cent on a monthly basis. Prices for food bought from stores were up 6.9 per cent annually, down from 8.5 per cent in July.
StatCan said shelter prices were also a significant fuel for inflation in August.
While the Bank of Canada says its interest rate hikes are working to tamp down price pressures, those higher borrowing costs also mean Canadians were again paying more on their mortgages in August.
Rents, too, were driven up in the month as StatCan noted higher interest rates put “barriers” on those looking to enter the housing market, increasing competition for rental units.
August’s consumer price index figures mark the second consecutive month inflation has accelerated in Canada.
Canada’s annual inflation rate fell to 2.8 per cent on an annualized basis in June, entering the Bank of Canada’s target range of one to three per cent for the first time since March 2021. However, the pace picked up in July to 3.3 per cent.
The Bank of Canada kept its key interest target on hold at five per cent earlier this month, but noted it was ready to raise rates if needed.
Bank of Canada deputy governor Sharon Kozicki is expected to deliver a speech at the University of Regina on Tuesday afternoon.
— with files from The Canadian Press
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