Canada’s inflation rate jumps to 4.1%, fastest pace since 2003

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Canada’s inflation rose in August at the fastest pace since 2003, driven by broad price gains, including shelters and services reopening in the summer.

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Statistics Canada said on Wednesday that the consumer price index jumped 4.1 percent in August from a year earlier, from 3.7 percent in July. For five consecutive months, the annual rate of inflation has exceeded the Bank of Canada’s target range of 1 percent to 3 percent.

The StatScan report comes just five days before the federal election, which saw affordability emerge as a major theme on the campaign trail, with all major parties reining in a variety of costs, including housing, child care and wireless plans. Consider installing.

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Prices increased in seven of the eight key components in August, with transportation costs up 8.7 percent. Excluding gasoline, annual inflation rose 3.2 percent.

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The Bank of Canada says the high inflation will prove to be temporary, and is partly a reflection of the fall in prices following the COVID-19 pandemic.

Another factor is troubled supply chains. The rolling lockdown coupled with strong consumer demand has made it difficult for companies to source key ingredients and inputs. In addition, there is a rush of goods to be shipped around the world, which increases shipping costs. This has put pressure on profit margins, with many companies opting to pass the higher costs on to consumers.

In August, supply shortages were noted on 624 investor calls by public companies or their analysts, according to a review of tapes on financial data platform Sentio Inc. Between 2005 and 2019, a monthly average of 58 calls referred to such challenges. Gave.

“The global supply disruptions I’ve talked about are leading to higher prices for motor vehicles and other goods,” Governor Tiff McCalem said in a speech last week. “We expect these factors driving inflation to be transitory, but their persistence and magnitude are uncertain and we will be monitoring them closely.”

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