Canada Inflation Accelerates

Canada’s annual inflation rate accelerated in April, led by car and gasoline prices, giving the central bank more scope to begin raising interest rates as soon as next month., Bloomberg 5/21/2010 10:50:23 AM

The consumer price index rose 1.8 percent, faster than 1.4 percent the previous month, on a 16 percent rise in gasoline costs, Statistics Canada said. The index excluding eight volatile items also accelerated, to 1.9 percent from 1.7 percent.

Seven of the eight main categories tracked by Statistics Canada increased in April from a year earlier. Transportation prices increased 6.2 percent, as vehicle prices advanced 5.3 percent and the cost of insuring a car gained 5.6 percent.

Statistics Canada’s index of shelter costs rose 0.8 percent on the year, led by a 3.6 percent gain in the cost of utilities such as electricity, water, natural gas and fuel oil. Mortgage interest costs fell 6.1 percent in April.

Food prices increased 1 percent, the smallest gain since March 2008, while the health and personal care index rose 3.3 percent.

The only category to post a decline was clothing and footwear prices, which fell 1.1 percent.

Overall inflation on a monthly basis rose 0.3 percent after being unchanged in March. The gain was led by higher prices for natural gas, vegetables and airplane tickets. On a monthly basis, core consumer prices also gained 0.3 percent after a 0.2 percent drop in March.

Canada Inflation Accelerates