Skyrocketing food prices push inflation to 2 per cent in January
Statistics Canada's January inflation number was up from 1.6 per cent in December
OTTAWA—Canada’s annual inflation rate hit two per cent last month as prices for fresh fruits and vegetables continued their surge.
Statistics Canada’s January year-over-year inflation number was up from 1.6 per cent in December.
The agency’s latest consumer price index found the overall cost of food was up four per cent last month compared to a year earlier—with fresh vegetable prices up 18.2 per cent and fruits up 12.9 per cent.
A closer look at the data shows that lettuce prices last month were 17.9 per cent higher than the year before, apples were up 16.6 per cent and tomatoes up 11.9 per cent.
The annual inflation rate climbed in every province last month at a time when the weaker Canadian dollar was contributing to higher costs for imported goods. The effects of the steep decline in oil prices have played a big part in pushing down the exchange rate.
Year-over-year prices moved upwards in every category of the index except for clothing and footwear, which saw a decrease of 0.3 per cent compared to January 2015.
Lower prices in January for items such as natural gas, fuel oil and telephone services kept downward pressure on the inflation reading, the agency said. Natural gas was down 18.6 per cent, fuel oil down 15 per cent and telephone services 2.5 per cent.
The overall January inflation rate also hit the Bank of Canada’s ideal target of 2.0 per cent.
The central bank watches the inflation rate very closely whenever it makes decisions on whether to move its benchmark interest rate. Its next policy meeting is scheduled for early next month.