By: Thomas I. Likness
Eagle News Service

(Eagle News) — The latest figures from Statistics Canada peg the year-over-year inflation rate in May at 3.4% — the smallest increase since June of 2021.

“The slowdown was largely driven by lower year-over-year prices for gasoline,” the agency said Tuesday in a release.

When gasoline prices are taken out of the mix though, other consumer prices rose an average of 4.4% in May, following a 4.9% increase in April.

Mortgage interest costs and rent remain the largest contributor to inflation.

Mortgage interest rose 29.9% on a year-over-year basis.

The agency notes shoppers are still feeling the pain at grocery checkout counters.

Food prices rose 9.0% in May virtually unchanged from April.

The highest increases were for edible fats and oils, bakery products and cereal products.

Prices for durable goods such as furniture and vehicles grew at a slower pace.

And the agency says in May, consumers paid 8.2% less for cellular services as a result of lower-priced data plans.

What effect this inflationary drop will have on interest rates won’t be known until next month when the Bank of Canada meets.

Most economists expect another rate hike as the bank tries to bring inflation to down to its target of 2.0%.

The central bank will announce its next interest rate decision July 12.
(Eagle News Service)`