Canada’s inflation rate fell to a 27-month low in June led by a deceleration in gas prices as grocery and housing prices remain elevated, according to new data from Statistics Canada.
Inflation, as measured by the consumer price index (CPI), fell to 2.8% in the 12 months to June from 3.4% in May. Analysts surveyed in a Reuters poll had been expecting an increase of 3%.
Excluding gasoline, inflation would have been 4%, compared to a 4.4% increase in May.
However, grocery prices and mortgage interest costs remained elevated, up 9.1% and 30.1% respectively in the 12 months to June.
Month-over-month, the CPI added 0.1% in June, following a 0.4% increase in May.
June’s CPI reading of 2.8% falls in line with the Bank of Canada’s target inflation range of 1% to 3%, but it has signalled that it will continue to keep interest rates elevated to put pressure on prices until inflation falls to 2%.
The central bank last week raised the interest rate by 0.25% to 5%.
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