Inflation picks up speed in Canada

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Both core and trim CPI — the measures the Bank of Canada favours when considering inflation, as they strip out the more volatile items — also accelerated in August.

Inflation gains were driven by higher year-over-year gasoline prices, up 0.8 per cent to mark the first increase since January, and a sharp acceleration from the 12.9 per cent decrease in July. Part of that is due to so-called base effects, where volatility in prices a year ago can skew increases or decreases in this year’s inflation print.

Canadians looking for a home also took a hit, with shelter costs accelerating to 6 per cent in August, up from 5.1 per cent in July, largely driven by the rental sector. The mortgage cost index was up 30.9 per cent in the month, reflecting higher borrowing rates.

Pain in the produce aisle, however, eased in August, while still remaining high. Grocery price inflation decelerated to 6.9 per cent from 8.5 per cent in July largely due to lower prices for fresh fruit, cereal and chicken. Consumers, however, paid higher prices for beef and coffee.

Grocery prices have proven a particularly thorny political issue, prompting the federal government to call the heads of the large grocers to Parliament Hill this week to discuss ways to drive down prices and ease pressures on the consumer.