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Canada's annual inflation rate dips to 3.1% in June

Credit: REUTERS/ALEX FILIPE

Canada's annual inflation rate in June dipped to 3.1% from a year-over-year increase of 3.6% in May, in part due to downward pressure from the prices of clothing and vegetables, Statistics Canada said on Wednesday.

Adds details of release, background

OTTAWA, July 28 (Reuters) - Canada's annual inflation rate in June dipped to 3.1% from a year-over-year increase of 3.6% in May, in part due to downward pressure from the prices of clothing and vegetables, Statistics Canada said on Wednesday.

Analysts polled by Reuters had expected the annual rate to fall to 3.4% in May.

Earlier this month, the Bank of Canada said inflation was expected to remain at or above 3% - the top of the bank's 1%-3% control range - through the rest of 2021, easing back to the 2% target by 2022. Bank Governor Tiff Macklem made clear he saw pressure on inflation as transitory.

"I think the Bank of Canada will be fairly pleased with that outcome or at least less nervous," said Jimmy Jean, chief economist at Desjardins Group.

The CPI common measure, which the Bank of Canada says is the best gauge of the economy's underperformance, dipped to 1.7% from 1.8%.

The June data set was the first to incorporate new values for the overall basket that give more weighting for shelter to reflect soaring housing prices.

Graphic - Canada economic snapshot:http://tmsnrt.rs/2e8hNWV

(Reporting by David Ljunggren)

((david.ljunggren@tr.com; +1 647 480 7891))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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