Gasoline powers high inflation rate

Rising food prices starting to bite into consumers' pockets
Jul 23, 2008 09:31 AM
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JULIAN BELTRAME
THE CANADIAN PRESS
OTTAWA–Living in Canada got a lot more expensive last month as the accelerating price of gasoline and the emergence of food inflation pushed the rate of increase in Canada's consumer price index to over three per cent for the first time in nearly three years.

Statistics Canada said Wednesday the country's annual inflation rate jumped to 3.1 per cent in June from 2.2 per cent the previous month, the biggest one-month leap since September 2005.

From May, prices were 0.7 per cent higher.

As was the case in 2005 when hurricanes Katrina and Rita caused a spike in oil prices, energy costs fuelled inflation in June.

The cost of filling up at gasoline stations rose by 26.9 per cent from a year earlier, and by 5.8 per cent from May.

If not for gasoline, Canada's annual inflation rate would have stood at a tepid 1.8 per cent in June, the agency said.

As well, fuel oil and other fuels rose 49.3 per cent, the same pace as in May.

As had been predicted for several months, food price inflation made an appearance, with store-bought food rising three per cent on an annual basis.

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