Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Inflation Jumps to 4.1% in Canada, Jolting Trudeau Election Bid

Published 15/09/2021, 14:20
Updated 15/09/2021, 14:20
© Reuters.

© Reuters.

(Bloomberg) -- Inflation in Canada accelerated to the fastest pace since 2003, a political headache for Prime Minister Justin Trudeau only five days before an election.

The consumer price index rose 4.1% in August from a year earlier, Statistics Canada reported Wednesday in Ottawa, marking the fifth straight month of inflation readings above the Bank of Canada’s 3% cap. That’s the highest since March 2003, when it touched 4.2%. Economists were predicting a yearly gain of 3.9%.

While policy makers are likely to view price pressures as transitory, the report comes at an inopportune time for Trudeau in the final days of a tight election battle. Affordability is a key campaign issue and the main opposition Conservatives have  been accusing the incumbent Liberal government of stoking inflation with debt-financed spending plans.

Still, Bank of Canada Governor Tiff Macklem, whose latest forecasts show inflation creeping up to 3.9% in the third quarter, has warned against overreacting to the  “temporary” spike that is being driven by global supply chain disruptions and pent-up demand for services as the economy reopens. There’s also a weak comparison to last year when price pressures were subdued during the pandemic.

The increase last month was driven by a sharp increase in the cost of airplane tickets and other traveling-related expenses. From a year ago, gasoline prices and housing costs remain key drivers. Gasoline prices rose 32.5% from year ago.

On a monthly basis, prices rose 0.2% versus economist estimates for a 0.1% gain. 

The average of core measures of inflation, often seen as a better gauge of underlying price pressures, rose to an annual 2.57% pace in August, the highest since 2009.

 

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.