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06-21-2006, 05:13 AM
Gas prices push inflation rate up to 2.8% in May
Updated Tue. Jun. 20 2006 12:57 PM ET
CTV.ca News Staff
Higher gasoline prices pushed inflation to 2.8 per cent in May -- up from 2.4 per cent the month before, Statistics Canada said Tuesday.
The inflation figure was higher than economists had predicted and could prompt the Bank of Canada to raise interest rates.
The core inflation rate, which excludes volatile components such as energy and food, recorded its strongest 12-month increase since December 2003, jumping from 1.6 per cent in April to two per cent in May.
Report on Business Television's Bridgitte Anderson told CTV Newsnet there were "signs of inflation" creeping into the Canadian economy.
"Back in May, the Bank of Canada signalled it was going to pause rising interest rates, but these inflation figures could change that," she said.
"I think we need to brace for more volatility."
Rising gasoline prices at the pump were a key factor in driving inflation, along with electricity and homeowners' replacement costs, StatsCan said.
The report said higher prices for crude oil boosted gasoline prices by more than 17 per cent across the country, including a 22.9 per cent jump in Alberta.
Electricity prices rose 6.2 per cent between May 2005 and last month, with Ontario registering the highest increase at 10.3 per cent.
Homeowners' replacement costs, which cover the worn-out structural portion of housing, rose 7.2 per cent on an annual basis, reflecting more expensive material and labour.
Hotel and motel rooms also cost more as owners started summer rates.
Meanwhile, the cost of computer equipment and supplies dropped in May, while video gear was also cheaper.
With files from the Canadian Press
Updated Tue. Jun. 20 2006 12:57 PM ET
CTV.ca News Staff
Higher gasoline prices pushed inflation to 2.8 per cent in May -- up from 2.4 per cent the month before, Statistics Canada said Tuesday.
The inflation figure was higher than economists had predicted and could prompt the Bank of Canada to raise interest rates.
The core inflation rate, which excludes volatile components such as energy and food, recorded its strongest 12-month increase since December 2003, jumping from 1.6 per cent in April to two per cent in May.
Report on Business Television's Bridgitte Anderson told CTV Newsnet there were "signs of inflation" creeping into the Canadian economy.
"Back in May, the Bank of Canada signalled it was going to pause rising interest rates, but these inflation figures could change that," she said.
"I think we need to brace for more volatility."
Rising gasoline prices at the pump were a key factor in driving inflation, along with electricity and homeowners' replacement costs, StatsCan said.
The report said higher prices for crude oil boosted gasoline prices by more than 17 per cent across the country, including a 22.9 per cent jump in Alberta.
Electricity prices rose 6.2 per cent between May 2005 and last month, with Ontario registering the highest increase at 10.3 per cent.
Homeowners' replacement costs, which cover the worn-out structural portion of housing, rose 7.2 per cent on an annual basis, reflecting more expensive material and labour.
Hotel and motel rooms also cost more as owners started summer rates.
Meanwhile, the cost of computer equipment and supplies dropped in May, while video gear was also cheaper.
With files from the Canadian Press
I was the only member on this board with a Yellow Focus Sedan, and a 2002+ Euro Facelift on a sedan.