Canadian Inflation Unexpectedly Rises

Canadian annual inflation unexpectedly rose 1.7% in April from 1.4% the month prior, for the first time in six months. Consumers shelled out more money for gas, transportation and food. The core index, which is the focus of the BoC, to 1.5% from 1.3% in March, Record fuel costs may be helping the Canadian economy, but they are diminishing the purchasing power of consumers, as the energy component rose 4.9% from 2.7% the month prior. The MPC will now have to contend with inflation concerns and slow growth as its counterparts are across the globe. Growth in the region has remained resilient on the back of the commodity boom, which has spurred hiring. Therefore, the central bank may look to pause its easing policy as it assesses the risks of rising prices.

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