Canada’s annual inflation rate hits 4.1%, highest since 2003

A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto

Canada’s annual inflation rate accelerated to an 18-year-high of 4.1% in August, pushed up in part by a big jump in gasoline prices, Statistics Canada said on Wednesday.

Analysts polled by Reuters had expected the annual rate to rise to 3.9% in August after posting a year-over-year increase of 3.7% in July. The August rate was the highest since the 4.2% recorded in March 2003.

Gas prices rose 32.5% compared to August 2020, mainly driven by lower production from oil-producing countries compared with pre-pandemic levels, Statscan said.

The three measures of core inflation all posted gains. CPI common, which the Bank of Canada calls the best gauge of the economy’s underperformance, edged up to 1.8% from 1.7% in July.

The Canadian dollar strengthened slightly to C$1.2671 versus the U.S. dollar, or 78.92 U.S. cents.

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