Inflation rate in Canada reached 6.8%.in April

Food and accommodation prices climb in Canada

Canada, Ottawa - Consumer prices in Canada rose 6.8 percent in April, slightly up from 6.7 percent in March, according to Statistics Canada last month. Food and property prices accounted for most of April's increase. The National Statistics Office said gas prices rose more slowly in April than in March, slowing the acceleration of the consumer price index (CPI) for all items in April. CPI climbed 5.8% in April, excluding gasoline, after gaining 5.5 percent in March. 

This was the fastest growth since the all-items excluding gasoline special aggregate was introduced in 1999. A strong employment rate, as unemployment fell to a fresh low in April, tends to put upward pressure on prices. Average hourly wages for white-collar workers rose 3.3% in April, according to Statistics Canada, indicating that prices are rising faster than average wages, resulting in a loss of purchasing power for Canadians."There is no relief in sight for Canadian consumers in terms of rising inflation," said Canadian Imperial Bank of Commerce economist Andrew Grantham in a market report. He believes that the fact that inflation is rising faster than expected virtually guarantees another 50 basis point hike at the central bank's next meeting in June, and that it may well follow that up with another large move to get the overnight rate to the bottom end of its neutral range, or 2 percent to 3 percent. However, signs of a slowdown in the domestic economy and domestic inflationary pressures will reduce interest rates thereafter, Grantham said.