Canada's inflation rate inches up again, to new 31-year high of 6.8%

The cost of living continues to rise at the fastest pace in decades, with Canada's official inflation rate rising at a 6.8 per cent annual pace in April, a new 31-year high.

Statistics Canada reported Wednesday that the cost of living crept higher mostly because of increases in the cost of food and shelter. Food prices have increased by 9.7 per cent in the past year, while shelter costs are up by 7.4 per cent.

Gas prices, though still well up from where they were a year ago, inched down during the month.

Economists had been expecting the inflation figure to ease slightly from March's 6.7 per cent level, but instead it went slightly higher. That's a troubling sign that inflation has yet to peak, even though it's at its highest level since 1991.

The U.S. has also seen its inflation rate skyrocket in recent months, but numbers for April suggest that the wave may have crested there, with the official figure cooling to 8.3 per cent in April from 8.5 per cent in March.

"Core inflation has been accelerating in Canada for a few months now, in contrast to the U.S.," economist Royce Mendes with financial services conglomerate Desjardins said. "What went up still isn't coming down in Canadian inflation, and might not anytime soon."

The high inflation number makes it even more likely that the Bank of Canada will hike its benchmark interest rate at its next policy meeting in early June