The rate of inflation in ÎÚÑ»´«Ã½ took a bit of a breather in April, to 4.3 per cent.
Inflation on the West Coast also managed to squeak in just below the national rate (4.4 per cent) after spending the last 12 months outpacing the national rate, according to data released Tuesday by Statistics ÎÚÑ»´«Ã½.
So while inflation was cooling in ÎÚÑ»´«Ã½, it grew one tick on a monthly basis across ÎÚÑ»´«Ã½.
Food prices remain a major pressure point for Canadian consumers with prices up 8.3 per cent on an annual basis in April compared with 7.9 per cent in March.
There was some relief at gas pumps, though, with the price of gasoline falling by 7.7 per cent year over year. Despite that big annual drop, prices increased 6.3 per cent on a monthly basis.
Statistics ÎÚÑ»´«Ã½ attributes the big monthly jump to an announcement from OPEC+ (countries from the Organization of Petroleum Exporting Countries Plus) to reduce oil output.
It now appears underlying core inflation is settling in around 4 per cent, according to BMO chief economist Douglas Porter.
He said in a note that’s “clearly still too high for the Bank of ÎÚÑ»´«Ã½'s comfort.”
The central bank put a pause on rate hikes in March and must now decide what to do on June 7 as labour markets remain tight, putting pressure on wage growth. Wage growth could in turn put pressure on inflation, which could force the Bank of ÎÚÑ»´«Ã½ to hike its key rate once more.
TD senior economist Leslie Preston said in a note she expects core inflation to decelerate to below three per cent in the second half of 2023.
“The BoC needs to remain vigilant to inflation pressures and may need to hike again if momentum in the domestic economy does not cool as expected,” she said.
RBC economist Claire Fan said she expects the Bank of ÎÚÑ»´«Ã½ to remain on the sidelines the rest of the year.
“Early signs that the lagged impact of higher interest rates are weighing on economic growth suggest underlying price pressures should continue to ease,” she said in a note.
