The country’s annual inflation rate accelerated to 2.1 percent last month to reach its highest mark in nearly a year, Statistics Canada said Thursday.
The November inflation reading followed a 1.4 percent increase in consumer prices in October. Last month’s increase was driven by higher costs for gasoline and air transportation, compared with a year earlier.
The result means the annual pace of inflation has now surpassed the Bank of Canada’s ideal target of two percent following a two-year low of one percent in June.
The central bank scrutinizes inflation data ahead of its interest-rate decisions. It’s scheduled to make an announcement next month.
“With economic momentum appearing to hold up into the fourth quarter … the case for the Bank of Canada to follow the Federal Reserve in hiking interest rates is building,” James Marple, senior economist at TD wrote in a note to clients. “Don’t be surprised if it comes sooner rather than later.”
Inflation has remained below two percent for almost all of 2017 and the rate hasn’t been as high as 2.1 percent since last January.
The report shows that pump prices delivered a major lift to last month’s overall inflation number after rising 19.6 percent compared with the year before.
Excluding gasoline, November’s inflation rate was 1.5 percent, an increase from 1.3 percent in October.
Two of the Bank of Canada’s three preferred measures of core inflation, designed to look through the noise of more-volatile items like gasoline, strengthened last month.
CPI-trim rose to 1.8 percent from 1.5 percent and CPI-median reached 1.9 percent compared to 1.7 percent in October, while CPI-common cooled to 1.5 percent from 1.6 percent.
By region, annual inflation was higher in every province last month with Manitoba, at 3.2 percent, and Saskatchewan, at 3.7 percent, seeing the biggest changes.
– With a file from Erica Alini