Canada’s annual inflation rate rose to 2.9 per cent in May.
In a report by Statistics Canada, it is largely driven by higher prices for services.
The result was up from an annual inflation rate of 2.7 per cent in April.
The report says the overall increase for May came as prices for services rose 4.6 per cent from a year ago, up from a 4.2 per cent increase in April. Prices for goods grew at the same rate as April at one per cent.
Following the Bank of Canada’s recent decision to cut its benchmark interest rate by a quarter of a percentage point to 4.75%, the inflation report has been released. The Bank targets an annual inflation rate of 2%.
Mortgage interest costs increased by 23.3% over the past year, while rent prices rose by 8.9%.
In May, travel tour prices were up by 6.9%, and air transportation prices increased by 4.5% compared to a year ago. Gasoline prices saw a 5.6% increase year-over-year.
Grocery prices in May rose by 1.5% compared to the previous year, slightly up from April’s 1.4% increase.
This marks the first rise in grocery prices since June last year.
Statistics Canada noted that consumers are paying 22.5% more for groceries compared to May 2020.
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