OTTAWA- According to data released on Tuesday by the government statistics office, Canada’s inflation rate dropped to 2.7 percent in April, the lowest level in several years, raising the likelihood of an impending interest rate cut.
The Consumer Price Index has now fallen below the upper end of the Bank of Canada’s 1.0–3.0 percent target range for four consecutive months. The figure was down from 2.9 percent in March.
In a research note, Royal Bank of Canada analyst Abbey Xu stated that the “persistently softer economic backdrop,” which has also witnessed rising unemployment, strengthens the case for the central bank to begin lowering interest rates.
According to Statistics Canada, the cost of food, services, and durable goods drove April’s inflation, while an increase in the price of fuel moderated it.
Food inflation that was purchased at grocery stores decreased to 1.4% yearly last month from 1.9% in March, the government reports.
Because of the shift to more expensive summer blends, increased oil prices, and an increase in the federal carbon fee, consumers paid 6.1 percent more at the pump this month compared to the previous year.
Rent, auto insurance premiums, and mortgage interest rates all increased throughout the month, but the cost of computer equipment, phone, and internet services decreased.
