Higher costs for things like gasoline and cigarettes boosted Manitoba’s annual inflation rate to its highest level in five months in January.
Statistics Canada data released today show’s Manitoba’s annual rate climbed to 2.6 per cent last month after falling to 2.1 per cent in December.
The last time it was that high was in August of last year, when it was 2.7 per cent.
January’s rate was the third-highest in the country after Prince Edward Island’s 3.2 per cent and Alberta’s 2.7 per cent. It was also more than a full percentage point higher than Canada’s rate of 1.5 per cent.
A 10.9 per cent spike in the cost of cigarettes and a 5.7 per cent increase in gasoline prices were two of the biggest contributors to the cost-of-living increase between January of last year and January of this year, the Statistic Canada data shows.
Others were a 4.7 per cent jump in the cost of telephone services and a 4.2 per cent increase in property taxes.
Despite January’s increase, Manitoba’s inflation rate still remains within the Bank of Canada’s target range for Canada, which is one to three per cent.
Nationally, the pace of inflation picked up in January as the consumer price index rose 1.5 per cent compared with a year ago, its biggest jump since the summer of 2012.
Statistics Canada said the gain compared with a CPI uptick of 1.2 per cent in December, while the Bank of Canada’s core index, which excludes some of the most volatile items, was up 1.4 per cent for January after posting a gain of 1.3 per cent in December.
Economists had expected a gain of 1.3 per cent for both the consumer price index and the central bank’s core index, according to Thomson Reuters.
Eric Lascelles, chief economist at RBC Global Asset Management, said the stronger inflation rate helps put to rest the slim chance of the Bank of Canada lowering interest rates to stimulate growth.
"The bank’s been sitting at a neutral position for a while, but expressing concern about low inflation. You have to think that concern starts to abate now," Lascelles said.
The Bank of Canada’s recent forecast that inflation will remain below its target of two per cent for about two years has raised concern of an economy too weak to push up prices.
"The low inflation concerns are perhaps starting to abate here. They’re not completely gone, but they’re starting to abate and our working assumption is that inflation probably has some further room to run to the upside," Lascelles said.
— Staff/Canadian Press