Canada’s inflation surprises higher in May, casting doubt on a July rate cut

By Alicja Siekierska
Yahoo Finance
June 25, 2024
Category: Finance & Economics
Region: Canada

Canada’s annual inflation rate reaccelerated unexpectedly to 2.9% in May while measures of core inflation also increased, according to Statistics Canada, reducing the odds of a Bank of Canada rate cut in July. Analysts had expected inflation to cool to 2.6% from 2.7% in April. Statistics Canada said that acceleration was largely due to higher prices for services, which increased 4.6% in May. …The Bank of Canada’s closely watched measures of core inflation also edged up in May, surprising economists. …”Overall, with the data showing much faster price pressures than expected, this casts a lot of doubt on the possibility of a July cut.” The slowing of Canada’s annual inflation rate in April was one of the factors that prompted the Bank of Canada to cut its benchmark interest rate for the first time in four years earlier this month.

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