Inflation in Canada nears 40-year high

Canadian consumer prices rose in May at rates not seen since January 1983, surging past analysts’ forecasts, data from Statistics Canada shows. The growth was largely driven by higher gasoline prices.

According to the report, the consumer price index surged 7.7% last month compared with a year ago.

The increase came as energy prices rocketed 34.8% on an annual basis, with gasoline prices up by 48%.

Grocery price gains matched April’s increase of 9.7%, shelter cost inflation also matched April at 7.4%. Prices for services were up as well, led by hotels and restaurants.

Inflation has now been above the Bank of Canada’s 2% target for 15 months.

“It’s clear that central banks have been losing sleep over inflation... with this report, they’ll need to renew their sleeping-pill prescriptions,” Jimmy Jean, chief economist at Desjardins Group, told Reuters.

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