Inflation continues to rise in April, up 6.8 per cent year over year with food prices among the biggest increases

Inflation continued to rise in April, up 6.8 per cent year over year thanks to the costs of food, gas and shelter.

That's slightly higher than the 6.7-per-cent rise in March, which was largely driven by an almost 40-per-cent rise in gas prices. In April, the price of gas was up by just over 36 per cent - still a steep increase, but a slowdown from March's breakneck pace.

Prices for groceries kept climbing at 9.7 per cent, up from 8.7 per cent in March, and the largest increase since September 1981. Fruit and meat were both up 10 per cent, pasta was up almost 20 per cent, bread more than 12 per cent, and cereal products almost 14 per cent.

The price of dairy and eggs was up almost eight per cent, with butter in particular up more than 15 per cent. Oranges were up more than 21 per cent, and lettuce 28 per cent, while edible fats and oils were up almost 29 per cent.

The cost of shelter was up 7.4 per cent, the fastest pace since June 1983, in part because of higher costs for natural gas and other fuels. The mortgage interest cost index also increased slightly, for the first time since April 2020. Homeowners' replacement costs - related to the price of new homes - were up 13 per cent. Rent prices increased by 4.5 per cent, partly driven by Quebec, Ontario and British Columbia.

Meanwhile, wages continued to fall far behind the rising cost of living. Average hourly pay was up 3.3 per cent, which means Canadians are losing purchasing power as inflation continues to rise. Inflation in the U.S. hit 8.3 per cent in April, just down from 8.5 per cent in March.

The war in Ukraine is partly to blame for this, as it has driven the price of wheat up. In addition, poor weather and higher prices for fertilizer and natural gas have contributed to rising food prices, according to Statistics Canada.

TD senior economist James Orlando wrote in a report that the bank doesn't expect much of a reprieve in sight for food costs.

On the shelter side, we are likely to see a continuation of rent price increases alongside rising mortgage interest costs," he wrote. This will be balanced against the impact of declining house prices."

As well, Orlando noted that gas prices are likely to keep going up: Anyone who has filled up their tank over the last couple of weeks knows that an acceleration of prices will show up in next month's CPI print."

The latest inflation data reinforces the likelihood that the Bank of Canada will hike its key rate by another 50 basis points on June 1, and again in July, said Orlando.

Rosa Saba is a Toronto-based business reporter for the Star.