Canadian inflation eased up on the accelerator last month in Ottawa, as weaker year-over-year growth in gasoline prices, hence helping to slow the annualized rate to 1.3 per cent.
Statistics Canada says the May inflation rate was also lower than April’s reading of 1.6 per cent because prices declined in categories such as electricity, bakery products and internet access services.
The agency says year-over-year gasoline prices rose 6.8 per cent in May after climbing 15.9 per cent in April.
The report says gasoline still remained one of the biggest upward contributors to inflation last month despite its slower price growth, along with other costs associated with shelter and transportation.
The data was released as the economy strengthens and the central bank prepares to make a scheduled rate announcement on July 12.
Last month’s smaller inflation number could weigh on the Bank of Canada’s decision, as the rate moved further away from its ideal target of two per cent.
The latest consumer price index also shows lower readings for two of the Bank of Canada’s three preferred measures of core inflation, which the central bank will scrutinize ahead of next month’s interest-rate decision.