OTTAWA: Canada’s annual inflation rate came in at 3.4% in May, its slowest pace in two years, data showed on Tuesday, weakening the case for another interest rate hike as soon as next month.
Analysts polled by Reuters had expected annual inflation to drop to 3.4% from 4.4% in April. Month over month, the consumer price index was up 0.4%, Statistics Canada said, a tick lower than forecasts for an increase of 0.5%.
The annual rate, which benefited from comparison to last May’s strong price increases, is the slowest since June 2021 and broadly in line with the Bank of Canada’s expectation that inflation will cool to around 3% by mid-year.
The central bank hiked its overnight rate to a 22-year high of 4.75% earlier in June after a series of surprisingly strong data, including an unexpected uptick in April inflation, which showed that the economy was running hotter than anticipated. –Agencies
