Inflation rate slows

Photo: Jon Manchester

Canadian inflation eased up on the accelerator last month as weaker year-over-year growth in gasoline prices helped slow the annual rate to 1.3 per cent, Statistics Canada said Friday.

The May inflation rate was also lower than April's reading of 1.6 per cent because prices declined in electricity, bakery products and Internet access services, the agency said in its latest monthly report.

The data comes as the economy strengthens and the Bank of Canada prepares to make a scheduled interest rate announcement on July 12.

Last month's smaller inflation number could weigh on the central bank's decision, as the rate moved further away from its ideal target of two per cent.

The latest consumer price index also showed lower readings for two of the Bank of Canada's three preferred measures of core inflation, which the central bank will scrutinize ahead of its interest rate decision.

In B.C., the inflation rate was 1.9 per cent, down from 2.1 per cent the previous month.