Weaker inflation slows to 1.3%, could weigh on central bank’s rate decision
OTTAWA — Steps by the Bank of Canada to prepare the country for an eventual interest rate hike are bumping up against an inflation rate that has eased up on the accelerator.
Weaker year-over-year growth in gasoline prices last month helped slow the annual inflation rate to 1.3 per cent for May, Statistics Canada said Friday.
The result was softer than economists expected and lower than April’s reading of 1.6 per cent, prompting some to predict it could slow the Bank of Canada’s move toward an interest rate hike.
The data point comes as the economy strengthens and the central bank sends out signals it’s moving closer to a rate increase. The bank will make its next scheduled interest rate announcement on July 12 when it also updates its economic outlook.