OTTAWA – The Canadian consumer price index was up 1.0 per cent in June compared with a year ago as higher prices for food and shelter were offset in part by lower gasoline prices, Statistics Canada said Friday.
The increase was in line with economist expectations, according to Thomson Reuters.
Statistics Canada said excluding energy prices, inflation was 2.1 per cent as seven of the eight major components were up from a year ago.
The latest reading on inflation follows a decision by the Bank of Canada this week to cut its key interest rate by a quarter of a percentage point to 0.5 per cent and lowered its expectations for economic growth this year.
In making its decision Wednesday, the central bank predicted inflation to ease to slightly below one per cent in the coming months before rising to its two per cent target early in 2016.
Statistics Canada said the transportation index, which includes gasoline, posted its eighth consecutive year-over-year decline as it slipped 2.6 per cent from last year as gasoline prices were down 14.1 per cent from the same month last year.
However, on a month-over-month basis, gasoline prices were up 6.0 per cent in June after rising 5.5 per cent in May.
The price of food was up 3.4 per cent compared with a year ago as the price of meat increased 6.6 per cent. Prices were also up for dairy products, fresh fruit and baked goods.
The cost of shelter was up 1.0 per cent, boosted by a rise in electricity prices. Home and mortgage insurance costs were also higher.
The Bank of Canada’s core index was up 2.3 per cent from a year ago. Economists had expected a gain of 2.2 per cent.
Regionally, prices were up from a year ago in nine provinces with Prince Edward Island posting the lone drop as it saw a decrease of 0.1 per cent. Saskatchewan posted the largest increase with a gain of 1.9 per cent, followed by Alberta with a gain of 1.7 per cent.