Canada’s inflation rate climbs to 5.1%, the highest since 1991

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Canada’s inflation rate hit 5.1% in January, its highest level since 1991.

Statistics Canada reported Wednesday that if volatile items, such as food and energy, are removed from the numbers, the cost of living rose at a rate of 4.3%. But even that muted figure is the highest since 1999.

Grocery bills continue to rise rapidly, with the price of food purchased from stores rising 6.5% in the year to January. This is the fastest pace since 2009.

“Rising grocery bills are likely a trend that continued into February, with protests blocking major commercial arteries for food,” said economist Royce Mendes, of financial services conglomerate Desjardins.

The cost of keeping a roof over your head also continues to climb, with shelter costs rising 6.2% over the past year. This is the fastest increase since 1990.

Gasoline prices rose 4.8% during the month and are now 31% higher than they were at the same time last year.

“With energy prices continuing to rise, inflation is expected to pick up further and is unlikely to slow significantly before April,” Mendes said.

By then, Canada’s central bank is expected to have raised its benchmark interest rate slightly, the first of many measures aimed at curbing runaway inflation.

Canada is not the only country struggling with high inflation. Supply chain imbalances caused by the pandemic, coupled with record amounts of stimulus spending, have combined to drive up inflation pretty much everywhere. The inflation rate in the United States reached 7.5% in January, its highest level in 40 years.

While economists expected the Canadian rate to be high, the 5.1% rate was higher than the 4.8% figure expected by a consensus of those polled by Bloomberg.

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