What happened: B.C.’s inflation rate hit 2.7% while the national rate rose to 2%
Why it matters: Inflation rising highest in parts of Canada with “most challenged local real estate markets and economies,” according to one economist
Inflation rose highest in B.C. compared with all the other provinces in April, according to Statistics Canada.
Data released Wednesday (May 15) reveals the province’s inflation rate rose to 2.7% last month.
“While of course the BoC [Bank of Canada] has to tailor monetary policy to nationwide conditions, it’s interesting to note that the hottest inflation is in parts of the country with the most challenged local real estate markets and economies,” Derek Holt, the head of Capital Markets Economics at Scotiabank, said in a note to investors.
He pointed out inflation was next highest in Alberta (+2.2%), Saskatchewan (+2.3%) and Manitoba (+2.3%).
Holt added that it’s unlikely the latest inflation numbers will affect any decision-making on the part of the Bank of Canada.
The national rate, meanwhile, rose to 2% that same month.
Food price inflation hit 2.9% in April compared with 3.6% a month earlier.
Energy prices, which have been a bane for many British Columbians filling up at the pumps, rose 1.9% in April compared with a decline of 1.2% in March.
“The strange combination of weak economic growth and a strong labour market will keep policy makers on their toes. At best it suggests that firms are still looking to expand, but are maintaining flexibility by adding employees rather than increasing investment,” TD senior economist James Marple said in note to investors.
“At worst it suggests a burgeoning productivity problem that means lower potential growth and less running room for policy. Ultimately policy makers will have to watch how this plays out. In the meantime, with global economic uncertainty increasing, monetary policy is likely to remain on standby.”