Canada’s inflation rate surges to 4%.

Last month, Canada witnessed a notable surge in its inflation rate, reaching an annual pace of four percent, primarily attributable to a spike in gasoline prices.

Statistics Canada released a report on Tuesday revealing that the inflation rate saw a substantial 0.7 percentage point increase, largely driven by the first annual rise in gasoline prices since January. In August alone, pump prices surged by 4.6 percent and were up by 0.8 percent compared to their levels a year ago.

It is important to note that energy prices, such as those of gasoline, have a considerable impact on the overall inflation rate due to their influence on various facets of the economy, ranging from production costs to the transportation of goods.

Last month, Canada witnessed a notable surge in its inflation rate, reaching an annual pace of four percent, primarily attributable to a spike in gasoline prices.

Statistics Canada released a report on Tuesday revealing that the inflation rate saw a substantial 0.7 percentage point increase, largely driven by the first annual rise in gasoline prices since January. In August alone, pump prices surged by 4.6 percent and were up by 0.8 percent compared to their levels a year ago.

It is important to note that energy prices, such as those of gasoline, have a considerable impact on the overall inflation rate due to their influence on various facets of the economy, ranging from production costs to the transportation of goods.

However, an unexpected source of relief emerged in the grocery aisle.

The cost of food bought from stores rose by 6.9 percent over the past year. Although this remains nearly double the overall inflation rate, it represents a decline from recent peaks that exceeded 11 percent.

Notably, this marks the most gradual annual increase in the average grocery bill since January 2022.

The surprisingly elevated inflation figure has heightened the likelihood of another interest rate increase by the Bank of Canada, with the probability now reaching as high as a 50/50 chance. However, Kavcic notes that numerous variables could come into play before the Bank of Canada’s next rate determination on October 25, including the release of another inflation figure for September.