The latest Statistics Canada inflation numbers
have brought some more good news for consumers and anyone looking for interest
rate relief.
The annualized rate of inflation in April
dipped again, falling to a three-year low of 2.7%, down from 2.9% in March.
Two key components in the inflation
calculation saw slowdowns last month: shelter costs, and food. Shelter costs – which include mortgage costs
and rents – increased by 6.4%, a 1 basis-point decline from March. Grocery price inflation eased to 1.4%, a drop
of 5 basis-points from March. Gasoline
prices, however, jumped 6.1%, which held the overall inflation rate somewhat
higher.
Encouragingly, so-called, core inflation –
which strips out prices for volatile items like food and fuel – also continued
to decline. This is the measure of
inflation the Bank of Canada uses when making its interest rate decisions. April’s average of the core inflation
measures came in at 2.75%, down from 3.05% the month before.
Both headline and core inflation now fall
inside the Bank’s 1.0% to 3.0% target range.
Many market watchers now believe the BoC will
likely go ahead with an interest rate cut at its next meeting on June 5th.
There is one significant report that will
arrive between now and then. The latest
Gross Domestic Product numbers will be released on May 31st.