Big bump in inflation

Ouch.

Canada's consumer prices were up a huge 3.1 per cent in June compared to a year
ago, pushed higher by expensive gasoline, Statistics Canada says.

June's increase was the largest since September, 2005. Excluding gasoline, total
inflation was up 1.8 per cent in the past 12 months, Statscan said.

Core inflation, which excludes the most volatile prices, was far more subdued, rising
just 1.5 per cent.

That's pretty far from the official target of 2%.

Yeah I know, the price of gasoline is like a force of nature; there's certainly nothing that the Bank of Canada can do about it. But like I keep saying, we best get used to it. Whether gasoline prices will continue to spur inflation over the long term is anyone's guess. The most optimistic scenario is that the market will keep finding ways to use less of it, keeping prices in check. But who knows, our society is so completely addicted to the stuff that it may take more time than we'd like. And until that time, expect more headlines like the above.