Bank of Canada rate decision too close to call after soft March inflation report [Video]

A surprise slowdown in inflation last month has turned the Bank of Canada’s interest rate decision on Wednesday into a coin toss, with some economists leaning toward a hold and others saying a cut is warranted.

The annual rate of inflation slowed to 2.3 per cent in March, Statistics Canada said Tuesday, down from 2.6 per cent in February.

A poll provided by LSEG Data & Analytics ahead of the release had expected yearly inflation to hold steady month-to-month.

StatCan pointed to drops in prices for gasoline, cell phone plans and the costs of travel tours — particularly with a chill in U.S. travel demand — as factors in cooling inflation last month.

James Orlando, director of economics at TD Bank, said he expects that headline inflation will continue to decline in April with the removal of the consumer carbon price already driving costs lower for motorists this month.

The …