Signs that underlying inflation was picking up in April put the Bank of Canada in a tricky position ahead of its June interest rate decision, with some economists arguing a second straight pause is now more likely.
“It is going to make it a much more challenging backdrop for the Bank of Canada to continue cutting rates, at least in the near term,” said Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO Capital Markets.
Statistics Canada on Tuesday reported a sharp slowing in the annual inflation rate — to 1.7 per cent in April from 2.3 per cent in March.
The end of the consumer carbon price at the start of April was largely to thank for the easing in the headline figure, StatCan reported.
With the carbon levy vanishing at the pumps and global oil prices falling from a mixture of reduced demand and a …