By David Ljunggren
OTTAWA (Reuters) -Canada’s annual inflation rate in April fell to 1.7% from 2.3% in March as overall energy prices plunged 12.7% after the removal of a federal consumer carbon tax, Statistics Canada said on Tuesday.
But two of the three core measures of inflation, which are closely watched by the Bank of the Canada, hit 13-month highs on underlying price pressures.
Analysts had forecast the annual rate would dip to 1.6%.
The Bank of Canada last month predicted it would fall to about 1.5%, mainly due to the removal of the carbon tax and lower crude prices.
Gasoline prices fell by 18.1% from April 2024 while year-over-year prices for natural gas dropped 14.1%.
Consumers though paid 3.8% more for groceries than they had done a year previously, up from 3.2% in March. Year over year, prices for travel tours rose 6.7% in April.
On a month-by-month basis, inflation dipped by 0.1% compared to analysts’ forecasts of a 0.2% drop.
The data are the penultimate major release before Bank of Canada’s next fixed rate announcement date on June 4. Statscan is due to release first quarter GDP figures on May 30.
After seven consecutive cuts since last June the Bank held rates on April 16 while saying it would be ready to move decisively if needed to keep inflation under control.
The bank pays particular attention to the core measures of inflation, which strip out the prices of more volatile items and do not take into account the removal of the carbon tax.
CPI median, which shows the median inflation rate across CPI components, rose from 2.8% in March to 3.2% in April, the highest since March 2024.
CPI trim, which excludes upside and downside outliers, edged up from 2.9% to 3.1%, also a 13-month high.
(Reporting by David Ljunggren, editing by Dale Smith)
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