In November 2019, the consumer price index shot up to 2.2 per cent compared to the same period in 2018, Statistics Canada recently reported. This comes after it held fast at 1.9 per cent for three months.
The cost of gasoline experienced a year-over-year increase of 0.9 per cent, compared to a 6.7 per cent drop in October 2019.
The rise of inflation rates in November compared to the previous three months came with increased energy prices, which too experienced their first year-over-year increase since April 2019. The prices for energy increased 1.5 per cent year-over-year in contrast to a decline of 2.9 per cent in October.
The Bank of Canada closely watches the country’s core inflation average, which was 2.17 per cent as opposed to October’s recalculated total of 2.10 per cent. The bank decided to retain its core interest rate at a firm 1.75 per cent, and also announced that they anticipated a rise in inflation within a range of 2 per cent for over two years in the next couple of months due to year-over-year changes in gasoline prices.
Royce Mendes, senior economist of CIBC, stated that the inflation rate rising above 2 per cent would not be of concern to the Bank of Canada. However, he mentioned that if the core measures should experience an increase, monetary policy makers might pay more attention to consumer prices. This has not yet been necessary since the inflation rate has been stably within the central bank’s targets.