FX.co ★ Canada's inflation rate skyrockets to new 31-year high

High inflation has become a grave problem for developed countries. Thus, Canada also reported an all-time jump in consumer prices. In March, inflation hit its 30-year high of 6.7%. Climbing prices of energy resources is the main driver of surging inflation.

According to official data, in March, Canada’s inflation surged by 6.7% on a yearly basis, beating more than a 30-year record. Analysts had expected a smaller rise to 6.1%. In an attempt to cap soaring prices, the local central bank raised the key interest rate by 0.5 percentage points to 1%. It is likely to raise the benchmark rate again very soon. Experts suppose that there are several reasons for the rapidly growing inflation: the coronavirus pandemic, supply chain disruptions, and rising prices of energy resources and essential goods.

For example, in March, the price of petrol increased by 11.8% compared to February and by a stunning 39.8% compared to the same period in the previous year. According to Statistics Canada, food prices rose by 8.7% on a yearly basis. However, the fastest growth was recorded in prices of durable goods and homes.

Countries from all over the world have recently faced the situation when inflation is spiraling out of control. Thus, in the UK, the annual inflation growth rate hit 7% in March. Such a jump was last seen in March 1992. In the US, annual inflation has also beaten its record high. Its growth accelerated to 8.5% from 7.9% recorded in February.