Inflation rate rises to 4.4% in April

The agency said its consumer price index was up 4.4% compared with a year ago, up from a year-over-year increase of 4.3% in March.

Statistics Canada said the first tick higher in the annual rate since it peaked at 8.1% in June 2022 was driven by higher mortgage interest costs which were up 28.5% compared with a year ago due to higher interest rates. A 6.1% increase in rent prices also helped push the overall rate up.

Meanwhile, grocery prices, which have been closely watched, were up 9.1% compared with a year ago, but that increase was smaller than the 9.7% year-over-year jump in March.

Prices for fresh vegetables in April were up 8.8% on a year-over-year basis compared with a 10.8% gain in March, while coffee and tea prices increased 6.4% year-over-year compared with 11.1% in March.

Gasoline prices in April were down 7.7% compared with a year earlier when prices were higher due in part to Russia's of Ukraine. However, gasoline prices in April rose 6.3% compared with March, the largest monthly increase since October 2022.

Despite the increase in the overall annual rate of inflation, the average of the three core measures of inflation that are tracked by the Bank of Canada came in at 4.70 % for April, down from 4.97% in March.

The Bank of Canada has forecast that the annual inflation rate will come down to about 3% in the coming months, but suggested that a return to its target of 2% will take longer.

The central bank's key interest rate has been on hold at 4.5%.

The Bank of Canada's governing council considered raising rates last month, but decided to remain on pause.