Consumer prices across Canada are going up at a rate not seen in three decades.
January inflation reached 5.1 per cent on an annual basis in January — the highest it’s been since September 1991, according to Statistics Canada data released Wednesday.
Gasoline prices led the way, up 31.7 per cent.
The cost of groceries also moved at a clip, rising 6.5 per cent. Last month, Canadian shoppers would have found margarine (+16.5 per cent), beef (+13 per cent) and chicken (+9 per cent) among the items costing much more compared with a year earlier.
Inflation in B.C. stood at 4.3 per cent last month “due in large part to higher rent,” according to Statistics Canada.
The national statistics agency noted the higher rent prices (+4.2 per cent) were being driven by increased demand as more people moved to the West Coast over the past year.
“The widespread nature of the price gains, including in many sectors that rarely see significant inflation, indicates that firms are readily able to pass on cost increases, especially at a time when consumer savings are relatively flush,” BMO chief economist Douglas Porter said in a note.
“Simply put, this is far too hot for comfort for the Bank of Canada, so expect a steady series of rate hikes in the coming meetings – we look for four in a row to start, and it may well require much more than that to bring inflation to heel.”
TD senior economist James Marple echoed Porter's sentiments.
“Higher interest rate hikes won't immediately quell inflation, but they are essential to slowing it over the medium term,” he said in a note.
“Still, it will be important to watch the evolution of supply constraints as well as geopolitical risks. Unless these ease, inflation will continue to surprise on the upside, making the job of achieving a smooth landing that much harder.”