April inflation rate falls to 2.7%

Grocery prices, at just 1.4% higher than a year ago, were one of biggest contributors to drop. But is it enough for Bank of Canada to cut rates?

- JOSH RUBIN

Canada’s annual rate of inflation fell in April, but whether the drop was enough for the Bank of Canada to start cutting interest rates next month is still an open question.

Canada’s annual rate of inflation — as measured by the Consumer Price Index — fell to 2.7 per cent in April, from 2.9 per cent a month earlier, Statistics Canada announced Tuesday. One of the biggest contributors to the drop was grocery inflation, with grocery prices just 1.4 per cent higher than they were a year ago.

Tuesday’s inflation data was one of the last major pieces of economic information to come out before the Bank of Canada’s next interest rate announcement on June 5.

On May 31, Statistics Canada releases Canada’s Gross Domestic Product for the first quarter, and also a preliminary GDP estimate for April.

The inflation number gave the Bank another bit of evidence that the economy isn’t overheating, but it won’t dramatically change the picture on its own, said Pedro Antunes, chief economist at the Conference Board of Canada.