Inflation Shoots Up
CBJ — The latest report from Statistics Canada indicates the annual inflation rate accelerated to an even 2% last month due to higher costs for air travel and vegetables. However, gasoline prices were lower.
The Consumer Price Index reveals that year-over-year prices picked up their pace in December after inflation was just 1.7% in November.
Inflation also moved upwards due to a 7.5% increase in mortgage interest costs, a 3.8% increase in restaurant bills and about a 5% rise in passenger vehicle insurance premiums.
Among the main downward forces on prices, consumers paid 5.6% less for hotels, 4% for natural gas and 5.7% for digital computing devices and equipment.
The Bank of Canada, which aims to keep inflation between 1% and 3%, can alter its trend-setting interest rate as a method of keeping inflation from climbing too high.
Bank of Canada governor Stephen Poloz recently kept his benchmark interest rate unchanged at 1.75% as the economy goes through a period of softness created by a recent, sharp decline in world oil prices.
Inflation by province: (previous month in brackets)
- Newfoundland and Labrador: 0.5% (0.8%)
- Prince Edward Island: 1.3% (1.0%)
- Nova Scotia: 1.6% (1.8%)
- New Brunswick: 0.9% (1.3%)
- Quebec: 1.1% (0.9%)
- Ontario: 2.3% (1.8%)
- Manitoba: 2.1% (1.7%)
- Saskatchewan: 1.1% (1.0%)
- Alberta: 2.1% (1.7%)
- British Columbia: 3.0% (2.4%)