Inflation Rate Hits Higher Than Expected 2.8 Per Cent in May
Posted on: Tuesday, 20 June 2006, 09:00 CDT
OTTAWA (CP) - Rising gasoline prices at the pump helped propel inflation to 2.8 per cent in May, from 2.4 per cent in April, Statistics Canada says.
The so-called core rate, which excludes volatile components such as energy and food and is closely watched by the Bank of Canada before it makes its interest rate decisions, was two per cent.
The May inflation figure was higher than economists had predicted and could prod the central bank to boost interest rates.
Higher prices for gasoline, electricity and hmewoners' replacement costs all drove inflation. Gasoline prices are up more than 17 per cent so far this year, with the price at the pump in Alberta up 22.9 per cent.
The statistics agency said the gas prices are pushed by higher world crude prices. Electricity costs were up 6.2 per cent and homeowners' replacement costs - the price of structural repairs - rose 7.2 per cent as materials and labour became more expensive.
Hotel and motel rooms also cost more as owners started summer rates. Meanwhile, costs of computer equipment and supplies slipped in May, mitigating the upward trend in inflation. Video gear was also cheaper.
Source: Canadian Press
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