Canada’s inflation rate unexpectedly rose an annualized 4.4% in April, the first acceleration in consumer prices since June 2022.
Statistics Canada said higher rent prices and mortgage interest costs largely led to the April increase in inflation, which ticked up from a reading of 4.3% in March of this year.
On a monthly basis, Canada’s Consumer Price Index (CPI) rose 0.7% in April, following a 0.5% advance in March.
Prices for gasoline (up 6.3%) contributed the most to the monthly rise in inflation across the country. Gasoline prices recorded their largest monthly increase in April since October 2022.
Nevertheless, gas prices were 7.7% lower in April compared with a year earlier. Excluding gasoline prices, inflation gained 0.5% on a monthly basis in April, said StatsCan.
Shelter costs rose a total of 4.9% on a year-over-year basis in April. However, the biggest contributor to that increase was mortgage interest costs, which increased 28.5% in April compared to a year earlier as a growing number of mortgages renewed at higher rates.
Prices for groceries rose at a slower pace in April (up 9.1%) than in March (up 9.7%), with the slowdown coming largely from smaller price increases for fresh vegetables and coffee.
Inflation rose at a faster pace in April compared with March in five Canadian provinces, with growth accelerating the most in Alberta due to higher electricity costs.
The Bank of Canada has paused its interest rate increases in recent month as it evaluates the impact of higher rates on the economy. The central bank’s trendsetting overnight interest rate is currently at 4.50%, its highest level in more than a decade.
Bank of Canada officials have said they are willing to resume interest rate increases should inflation continue to remain above its annualized target of 2%.
