Annual rate down to 2.7% in June

Experts believe Statistics Canada data increases potential for a Bank of Canada cut next week

- JOSH RUBIN

Canada’s annual rate of inflation fell in June, Statistics Canada revealed Tuesday, increasing the odds of a Bank of Canada interest rate cut next week.

The consumer price index — a broad-based measure of inflation — was 2.7 per higher in June than a year ago. That’s down from 2.9 per cent in May.

Lower prices for gasoline were largely responsible for the June decline.

Tuesday’s news — combined with other recent economic data — should be enough for the Bank of Canada to cut its key overnight lending rate for a second straight meeting next Wednesday, most economists agreed.

“June’s CPI … was a small relief after an upside surprise in May,” said RBC economist Claire Fan. “We expect the BoC will carry on with easing the monetary brakes on a weak economy, and follow up with another rate cut at its July meeting next week.”