Statistics from Canada said on Wednesday that the rise in the price of gasoline was a significant factor in the rise. Gas prices rose 12 percent in May alone and are up 48 percent from a year earlier. Food prices have also been a major driver of growth, with food bills up 9.7 percent last year. In the food category, the cost of edible fats and oils skyrocketed by 30%, the fastest increase ever recorded. Russia’s invasion of Ukraine is a major factor in this rise, as Ukraine is one of the world ‘s leading suppliers of sunflower oil and the war has caused shortages of basic food supplies. CLOCKS How the war in Ukraine leads to a shortage of sunflower oil:
Because the war in Ukraine causes a great shortage of sunflower oil
Food researchers say the shortage of sunflower oil caused by the war in Ukraine will worsen. The cost of home furniture is also rising at a record high, with furniture prices rising 15.8 percent last year amid higher shipping and input costs. A significant factor in this increase was the introduction of tariffs of up to 300 percent on some upholstered furniture from Vietnam and China last year, CBC News reported.
Higher increase than expected
Economists had expected the rate to rise from a 30-year high of 6.8% in April, but figures for May exceeded those expectations. Prices rose by 1.4 percent in May alone. Seasonally adjusted, May saw its biggest month-on-month rise in inflation since 1992. “If you are not over 40, you have never experienced such inflation and unfortunately, we do not expect much relief in the future,” said TD Bank economist Leslie Preston. “Inflation is expected to remain high until 2022.” Canada is not the only country facing inflation at the highest level in decades. In the US, inflation is now over 8 percent, and new data from the UK show that the cost of living is rising at an annual rate of 9 percent. While Canada’s inflation rate is rising rapidly no matter how you cut it, Statistics Canada has recently made some changes to the way numbers are ranked, with more emphasis on things like shelter and adding the cost of new and used vehicles to its official index. first time. According to the data service, the cost of buying a passenger car increased by 6.8 percent last year. Although this is lower than the overall inflation rate, it was nevertheless one of the most important factors contributing to the higher overall growth, Statscan said.
The Bank of Canada is now more likely to raise lending rates
Higher-than-expected inflation makes it possible for the Bank of Canada to raise its benchmark interest rate by three-quarters of a percentage point at its next policy meeting in July in a bid to curb dramatic price increases. The central bank cut its lending rate to 0.25% in early 2020 to stimulate the economy through the pandemic, but in recent months it has been moving aggressively in raising interest rates. Another 75-point increase will bring the bank’s key lending rate to 2.25%, the highest since the 2008 financial crisis.
