The rate of inflation in B.C. managed to fall below the national average last month, jumping to 7.9 per cent in June compared with the nation’s 8.1 per cent.
The national annual rate of inflation is the highest the country has seen since January 1983, according to data released Wednesday (July 20) from Statistics Canada.
And while Canada’s inflation rate continues to rise on a monthly basis (7.7 per cent in May compared with 8.1 per cent in June), inflation in B.C. eased up slightly during that same period, from 8.1 per cent to 7.9 per cent.
In fact, B.C.’s inflation rate is now the lowest among the four largest provinces after being the highest one month earlier. Alberta now leads the way among the big provinces at 8.4 per cent.
Canadians are now paying 54.6 per cent more for gasoline than they were a year ago and are also facing steep price hikes for traveller accommodations (+49.7 per cent), passenger vehicles (+8.4 per cent), shelter (+12.2 per cent).
“With gasoline prices expected to fall next month, we could finally have seen peak inflation," CIBC economist Karyne Charbonneau said in a note.
She added that the Bank of Canada may now opt for a 50 basis points rate-hike in September based on this and data to be released next month. This comes after the central bank unexpectedly raised its key rate one full point earlier this month.
“It's really saying something when an 8.1 per cent inflation rate is greeted with a modicum of relief in financial markets because it wasn't quite as awful as expected,” BMO chief economist Douglas Porter said in a note.
“Perhaps the positive takeaway here is that the latest upswing was driven by all the usual suspects – gasoline, autos, motels, mortgage rates – and there were no other nasty upside surprises.”
His sentiment echoed that of CIBC’s Charbonneau, predicting a rate-hike of 50 basis points by the Bank of Canada in September.
“Looking forward, we hope to see a continued deceleration in the monthly numbers, as gas prices are set to be a significant downward force in the July print,” TD director of economics James Orlando said in a note. “Even still, this should keep the year-on-year numbers uncomfortably elevated through 2022.”
He said markets are forecasting a rate-hike of 75 basis points in September.
