Canadian inflation rate hits 30-year high

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According to the latest report from Statistics Canada, the country’s inflation rate has hit a 30-year high at an annual pace of 4.8 per cent in December.

Higher food prices and the consquent rise in cost of living are said to have caused the fastest increase in inflation since 1991.

In 2021, Canadians saw the highest rate of inflation since 1991 as the market grappled with the COVID-19 pandemic, supply chain disruptions, rebounding energy prices, unfavourable weather conditions and rising housing costs, StatCan said.

While Canadians have definitely felt the pinch at the grocery stores and gas pumps, prices of everything from food to furniture and natural gas have risen the country’s statistical agency reported.

Gasoline topped the list with an increase of 31%, fuels and fuel oils followed with a rise of 24.4%. Natural gas which heats many homes has seen an increase of 16.1%.

Statistics Canada reported that grocery prices which affects all Canadians increased by 5.7 per cent, the biggest annual gain since 2011. Canadians are reportedly paying 4.3% more for meat while the price of apples and oranges have increased by more than 6 per cent.

Not surprising, housing prices also climbed by 9.3 per cent compared with December 2020. Prices for household appliances rose by 8.9 per cent.

Wages which affect buying capacity, on the other hand, seem to be the only thing that has not have not kept up with inflation rates. Statistics Canada said wages rose 2.6 per cent between December 2020 and last month. This means Canadians experienced a drop in their purchasing power.

As a result, the Bank of Canada which has said that it would act to stop runaway inflation is expected to raise interest rates at the announcement scheduled for next week.

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