Policymakers view the inflation rate increases in Canada as a short-term increase in consumer prices.
- The inflation rate forecasts of economists was 3.5%, but consumer prices rose by 3.6% in May higher than 3.4% in April.
- The core inflation rate also increased to 2.3%, the highest rate since 2009. The core inflation is a good measure of the pressures on consumer prices.
- The Bank of Canada is not concerned with the sudden increase in inflation rates, stating it is driven by one-off market factors.
The short-term pressures on prices are growing as businesses struggle to balance increased demand against shortage of supplies.
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Source: StatCan.
