Canada inflation hits 39-year high

Canadian inflation jumped to 7.7 per cent in May, marking the largest annual increase in prices for goods and services in almost four decades, the government statistical agency said Wednesday.

The figure topped even the most bullish forecasts, following a 6.8 per cent rise in prices the previous month.

The price increases, Statistics Canada said in a statement, were  "broad-based, pinching the pocketbooks of Canadians and in some cases affecting their ability to meet day-to-day expenses."

Desjardins analyst Royce Mendes reacted by saying the agency  "really should add a warning label to these scorching hot inflation prints."

"We had expected stronger price increases than the consensus, but this is very surprising," he said in a research note, warning that a  "jumbo-sized" interest rate hike by the Bank of Canada is now likely coming.

According to Statistics Canada, gasoline led the rise in prices, up 48 per cent in the 12 months to May 31. Groceries also cost more (up 9.7 per cent) due to supply chain disruptions as well as higher transportation and input costs.

Cooking oil notably recorded its largest price increase ever. Costs of fresh vegetables such as onions, peppers and carrots, as well as fish also rose