Canada Global (Web News) As higher housing costs led to the first acceleration in the consumer price index in ten months, Canada’s annual inflation rate unexpectedly increased to 4.4% in April, according to Statistics Canada data released on Tuesday.
The annual inflation rate was forecasted by analysts surveyed by Reuters to decrease slightly to 4.1% from 4.3% in March. The consumer price index increased by 0.7% over the previous month, exceeding the projected increase of 0.4%.
The cost of food increased less quickly in April than it did in March, thanks in part to reduced price increases for fresh vegetables, coffee, and tea, according to Statscan. Prices increased 4.4% when food and energy were excluded compared to a rise of 4.5% in March.
CPI-median and CPI-trim, the Bank of Canada’s (BoC) two basic indicators of underlying inflation, averaged 4.2% vs. 4.5% in March.
At its most recent two policy-setting meetings, the central bank left rates constant while it evaluated whether its eight straight rate increases had been sufficient to contain inflation.
BoC Governor Tiff Macklem has stated that the central bank is prepared to raise interest rates further if Canadian inflation is stuck well above the Bank of Canada’s 2% target.
According to Statscan, higher rent and mortgage interest costs were the main drivers of the annual inflation rate in April. According to the agency, the climate of increased interest rates may have stimulated a greater demand for rental housing, resulting in rent increases in April.
