22 June 2018

Prices for telephone services, vegetables and travel accommodation were down, reducing the overall inflation rate.

Meanwhile, economists expected a 2.6% increase. It means the chances for a rate hike by the central bank are becoming weaker.

Usually, the Bank of Canada raises its key lending rate in order to cool down the overheated economy, but as the inflation is slowing, there’s no need for that.

Before the inflation numbers were released, the odds of a rate increase next month, in investors’ opinion, were 65%. Now they’re down to 53%.

Another report by Statistics Canada says retail sales fell by 1.2% in May, while economists predicted no changes. It means the economy is cooling already and there’s no need for the BoC to interfere.