Inflation continues to soar and reached 8.1% in June in the country

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Inflation continues to soar and reached 8.1% in June in the country

The biggest increase noted from May to June concerns transport.

The increase in June was mainly due to soaring gasoline prices, which rose by 54 .6% in one year.

Although the Bank of Canada has announced several key rate increases in recent months, inflation continues to gallop in the country. Statistics Canada announced on Wednesday that the consumer price index (CPI) rose 8.1% in June year-on-year.

The consumer price index consumption continues to grow at a rate not seen in more than 40 years. Inflation in the country reached 7.7% in May and 6.8% in April.

The largest increase noted from May to June concerns transport (+2.2%). Statistics Canada cites the example of airline tickets, the price of which soared by 6.4% between May and June 2022. With the easing of public health restrictions and the #x27;travel craze in June, the cost of related services increased.

The federal study also reveals that the acceleration of inflation in June was mainly due to higher gasoline prices, which continue to rise.

Year-over-year, consumers paid 54.6% more for gasoline in June, after paying 48% more in May, Statistics Canada reports.

Excluding gasoline prices, the consumer price index rose 6.5% year over year in June, after increased by 6.3% in May, says the analysis.

Motor vehicle prices also continue to rise. Consumers must pay 8.2% more in June for their purchase compared to the same period last year. At issue: the shortage of semiconductor chips which is putting upward pressure on prices.

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Other sectors affected by inflation between May and June were Health & Personal Care (+0.3%), Leisure, Education & reading (+0.8%), clothing and footwear (+0.5%), as well as current expenditure, furniture and household equipment (+0.1%).

The price of food stabilized during the same period, as did that of alcoholic beverages and tobacco and recreational cannabis products, the study found.

In Quebec, the CPI increased by 8%, a slightly lower increase than the national average, but in the three Maritime provinces, the increase was above average: 9.3% in New Scotland, 9.1% in New Brunswick and 10.9% in Prince Edward Island.

Last week, the Bank of Canada upgraded its inflation forecast and said it expected prices to rise about 8% over the next few months. month.

In an interview on ICI RDI, economist Benoit Durocher explains the risk of setting Canada into an inflationary spiral. This phenomenon occurs when rising wages fuel rising prices. The Bank of Canada's aggressive monetary policy could defuse it, he says.

The good news is that the Bank of Canada is not sitting idly by, observes this senior economist of the Mouvement Desjardins. It is on the attack against inflation and it will eventually pay off.

The central bank has raised its key interest rate by 100 basis points. percentage on July 13, an exceptional measure aimed at avoiding an uncontrollable spike in prices.

With information from La Presse canadienne, and Reuters

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