Statistics Canada said Tuesday the annual pace of inflation rose in April for the first time since it peaked in June last year.
The agency said its consumer price index was up 4.4 percent compared with a year ago, up from a year-over-year increase of 4.3 percent in March.
Statistics Canada said the first tick higher in the annual rate since it peaked at 8.1 percent in June 2022 was driven by higher mortgage interest costs which were up 28.5 percent compared with a year ago due to higher interest rates. A 6.1 percent increase in rent prices also helped push the overall rate up.
Meanwhile, grocery prices, which have been closely watched, were up 9.1 percent compared with a year ago, but that increase was smaller than the 9.7 percent year-over-year jump in March.
Prices for fresh vegetables in April were up 8.8 percent on a year-over-year basis compared with a 10.8 percent gain in March, while coffee and tea prices increased 6.4 percent year-over-year compared with 11.1 percent in March.
Gasoline prices in April were down 7.7 percent compared with a year earlier when prices were higher due in part to Russia’s of Ukraine. However, gasoline prices in April rose 6.3 percent compared with March, the largest monthly increase since October 2022.
Despite the increase in the overall annual rate of inflation, the average of the three core measures of inflation that are tracked by the Bank of Canada came in at 4.70 percent for April, down from 4.97 percent in March.
The Bank of Canada has forecast that the annual inflation rate will come down to about three percent in the coming months, but suggested that a return to its target of two percent will take longer.
The central bank’s key interest rate has been on hold at 4.5 percent.
The Bank of Canada’s governing council considered raising rates last month, but decided to remain on pause.
