Canada’s 2.9 percent hike in annual inflation rate in May largely driven by services prices, groceries

Canada's Inflation rise. Representational image by Pixaby

Ottawa/CMEDIA: Owing to higher prices of groceries, services including tours and air travel, Canada’s annual inflation rate rose to 2.9 percent in May, Statistics Canada reported on Tuesday.

While the prices for services rose 4.6 percent from a year ago, prices for goods rose one percent, reported the agency.

The 1.5 percent rise in grocery prices year-over-year in May, was higher compared with April’s rise of 1.4 per cent.

The annual inflation rate for April was 2.7 per cent.

Some of the increases such as prices for cellular services, rent, travel tours and air transportation grew at a faster pace, according to the data agency. 

The latest consumer price report follows the Bank of Canada’s cut its benchmark interest rate by a quarter of a percentage point earlier this month to 4.75 per cent.

The central bank’s preferred measure of core inflation was also up in May more than economists expected.

The central bank’s next rate decision, set for July 24, along with the upcoming June inflation data,  would reportedly be affected by today’s inflation reading.