A widespread slowdown in price increases caused the consumer price index to rise 2.7% year over year in April in Canada, lower than the increase of 2 .9% observed in March.
According to Statistics Canada, the price increase has eased for food, services and durable goods. Higher gasoline prices, however, have slowed the slowdown in inflation.
The data released Tuesday brings good news for the Bank of Canada, which expects a sustained decline in inflation toward its 2% target.
They should also play a key role in the central bank’s next decision concerning interest rates, scheduled for June 5.
While food prices rose 1.4% year over year in April, this increase was lower than the 1.9% increase recorded in March.
For their part, gasoline prices at the pump increased 6.1% year over year in April, after increasing 4.5% in March.
Excluding gasoline, prices increased 2.5% in April compared to the same month last year.
The core measures used by the Bank of Canada to measure inflation, which do not take into account price volatility, also slowed last month and are now all below 3%.
The central bank has signaled that it is getting closer to cutting interest rates, but has warned that it wants the slowdown in inflation to continue for longer.
Before Tuesday’s data release, economists were divided on whether the Bank of Canada could decide to cut rates as early as June or wait until July.
The Bank of Canada’s key rate is currently at 5.0%, its highest level since 2001.
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