Canada inflation hits 18-year-high with election just days away

OTTAWA, Sept 15 (Reuters) – Canada’s annual inflation fee accelerated to an 18-year-high in August, pushed by broad upward value pressures, information confirmed on Wednesday, simply days earlier than a hotly contested federal election that would see Prime Minister Justin Trudeau’s Liberals ousted.

The speed rose to 4.1% in August, its quickest clip since March 2003, Statistics Canada stated, beating analyst estimates and prompting Trudeau’s most important rival to pounce over the rising price of residing.

“The numbers launched in the present day make it clear that below Justin Trudeau, Canadians are experiencing an affordability disaster,” stated Erin O’Toole, chief of the principle opposition Conservatives, in a press release.

The Conservatives have over Trudeau’s Liberals at 31.2% to 30.5% simply days earlier than the Sept. 20 vote, based on a brand new Nanos Analysis ballot. The left-leaning New Democrats are in third at 21.4%.

International locations all over the world are grappling with sizzling inflation amid provide chain hurdles and labor shortages as restrictions are eased and tightened with every new wave of the virus, resulting in uneven demand and provide bottlenecks.

The Financial institution of Canada has stated it expects headline inflation to stay above its 1%-3% management vary this yr, earlier than easing again to the two% goal in 2022.

“This does not imply something short-term for the Financial institution of Canada. They have been very insistent that the inflation shock is transitory,” stated Andrew Kelvin, chief Canada strategist at TD Securities.

In Canada, the new inflation print was pushed by excessive gasoline costs, rising housing prices and a surge within the costs of products like furnishings, home equipment and automobiles, together with excessive travel-related prices as restrictions eased.

That was the , the place a harsh fourth wave has put a damper on journey.

“It’s actually the mirror reverse of what we noticed within the U.S. yesterday, the place we had the journey parts displaying indicators of cooling. Right here, they’re displaying indicators of heating up,” stated Jimmy Jean, chief economist at Desjardins Group.

“It’s nonetheless a part of the reopening impact. In August we have been nonetheless getting again to regular,” Jean added.

Analysts polled by Reuters had anticipated the annual inflation fee to rise to three.9% in August. At 4.1%, it was the best because the 4.2% recorded in March 2003.

The three measures of core inflation all posted beneficial properties. CPI widespread, which the Financial institution of Canada calls the most effective gauge of the financial system’s underperformance, edged as much as 1.8% from 1.7% in July.

The Canadian greenback was buying and selling 0.2% increased at 1.2663 to the dollar, or 78.97 U.S. cents.

Further reporting by David Ljunggren in Ottawa and Fergal Smith and Nichola Saminather in Toronto;
Enhancing by Andrew Heavens, Paul Simao and Andrea Ricci

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