May inflation hit British Columbians harder than consumers in other provinces, led by gasoline prices that were up nearly 23% year over year, according to Statistics Canada.
The consumer price index (CPI) for both B.C. and Manitoba rose 2.7% annually – the fastest rate in the country, after Saskatchewan (+3.0%) – and above a national increase of 2.2%.
In addition to a 22.9% jump in gas prices – which follows a 14.2% year-over-year rise in April – price increases for air transportation (+8.5%), food from restaurants (+4.5%) and mortgage interest (+3.8%) contributed most to the 12-month change.
TD Bank senior economist James Marple commented in an investor note that outside of energy, price growth was fairly soft.
Energy prices rose 11.9% in May on an annual basis, following a 6.3% gain in April. Excluding energy, national CPI rose 1.6% year over year, and decelerated April to May by 30 basis points.
“The data flow this week suggests little need for urgency from the Bank of Canada to raise interest rates,” wrote Marple.
“We expect just one more hike from the Bank of Canada this year, before it pauses to assess the state of a Canadian economy in the midst of a slowing housing market and ongoing trade uncertainty.”
Not all prices went up in May. A 7.1% drop in the cost of telephone services and a 5.5% decrease in natural gas prices in part weighed inflation down.
Month to month, Canadian CPI rose just 0.1% on a seasonally adjusted basis.