Continued climb of fresh fruit, vegetable prices push Canadian inflation to 2%

OTTAWA-Canada’s annual inflation rate rose in January at the fastest pace in more than a year as the impact of a weaker Canadian dollar pushed up prices for fresh vegetables and fruit.

The annual inflation rate rose to 2% in January, after increasing 1.6% in December.

Higher fruit and vegetable prices were also a factor, climbing up 18 per cent annually in January after rising 13 per cent in December.

Fresh vegetables such as includes broccoli, cauliflower, celery and peppers saw the largest year-over-year increase at 22.7%.

Gas prices were the biggest contributor to the increase, as pump prices were more expensive in January than they were the same month a year earlier for the first time since the oil price slowdown that began in late 2014. Clothing and footwear prices dropped 0.3 percent, whereas transportation was up 2.2 percent. Natural gas was down 18.6 per cent, fuel oil down 15 per cent and telephone services 2.5 per cent. Its next policy meeting is scheduled for early next month.

The overall January inflation rate also hit the Bank of Canada’s ideal target of 2.0 per cent.

Inflation wasn’t just restricted to food, as core prices, which exclude food and energy because their prices can be volatile, rose two per cent over the past 12 months.

The value of Canadian wholesale trade rose more than expected for a second month in a row in December, led by gains in the motor vehicle and parts sector, data from Statistics Canada showed on Thursday.