TORONTO (Reuters) – Canada’s annual inflation rate accelerated to 7.7% in May, the highest since January 1983, on gasoline prices, as well as services like hotels and restaurants, Statistics Canada said on Wednesday.
Analysts polled by Reuters had expected the annual rate to rise to 7.4% in May from 6.8% in April.
Market reaction: CAD/
ANDREW KELVIN, CHIEF CANADA STRATEGIST AT TD SECURITIES
“It’s a bit alarming, particularly the breadth of inflation we’re seeing, I think it really reinforces that Bank of Canada needs to take drastic actions to bring inflation under control. I think it explains why they have sounded suddenly so alarmed about the inflation outlook over the last three weeks or so. And it reinforces our expectation for the Bank of Canada with rates by 75 basis points at its next meeting.”