Canada’s annual inflation rate hits an 18-year high in August 2021. Source: Reuters
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  • Canada’s inflation rate hits an 18-year high, just ahead of the Federal elections
  • Consumer prices rose 4.1 per cent in August 2021 compared to the year before, driven in part by a 32.5 per cent year over year hike in gasoline
  • The Bank of Canada’s inflation target is 2 per cent, the mid-point of the target range of one to 2 per cent
  • Canadians will head to the polls on Monday, September 2o, with polls putting the Conservatives and Trudeau’s Liberals in a dead heat

Canada’s annual inflation rate for August has hit its highest rate since March 2003, according to the data from Statistics Canada.

Consumer prices rose 4.1 per cent in August 2021 compared to the year before which Statistics Canada attributed primarily to “an accumulation of recent price pressures and from lower price levels in 2020”.

Durable goods, including vehicles and furniture, were a major contributor, along with the increasing price of services as lockdowns ease and summer approaches. Traveller accommodation, for instance, jumped close to 20 per cent from August last year.

Additionally, gasoline prices hiked 32.5 per cent year over year due to lower levels of production compared to pre-pandemic times, and low prices in 2020. Excluding gasoline, consumer prices in August rose 3.2 per cent year over year.

Gasoline prices rise in August. Source: Statistics Canada

The pace at which the consumer price index rose in August is higher than the Bank of Canada's inflation-control target range of one to 2 per cent, and mid-point target of 2 per cent.

The economic data was released less than a week before Canadians vote in the Federal elections on Monday, September 2o, 2021.

A poll carried out by Ipsos on behalf of Global News between September 10 and 13, put the Conservatives and Trudeau's Liberals in a dead heat. Each one was tipped to secure 32 per cent of the popular vote, followed by the NDP on 21 per cent.

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