Inflation dipped to 2.7% in June as gas price growth slowed

Canada's annual inflation rate fell to 2.7 per cent in June — down from 2.9 per cent in May — mostly due to slower increases in gasoline prices, Statistics Canada said on Tuesday.

Compared to June of last year, gasoline prices rose an average of 0.4 per cent in June. That's down from a 5.6 per cent annual increase in May.

The inflation rate for groceries also accelerated for the second month straight to 2.1 per cent, after mostly falling since January of last year, when prices rose 11.4 per cent annually.

Price growth accelerated for some types of food, like fresh vegetables, dairy and non-alcoholic drinks.

These inflation numbers are the last to be released before the Bank of Canada decides whether to change its key interest rate on July 24.

«The inflation data for June gave the Bank of Canada what it needed in order to cut interest rates at next week's meeting,» said CIBC economist Katherine Judge in an emailed statement.

In June, the central bank made its first rate cut since March 2020, lowering it to 4.75 per cent.