(Bloomberg) -- Canada’s inflation rate held steady at around the central bank’s target last month, with few signs of any sharp pick-up in price pressures as the economy operates near its full capacity.
The consumer price index recorded an annual pace of 2.2 percent in April, down from 2.3 percent in March, Statistics Canada reported Friday. Economists expected a 2.3 percent gain. A narrower gauge of core prices closely tracked by the Bank of Canada was little changed at 2 percent.
The numbers were broadly in line with economist expectations and may reinforce the Bank of Canada’s outlook that inflation will remain in check even as gasoline prices rise and wages are picking up with unemployment at the lowest in decades.
The central bank forecasts a temporary quickening of inflation in coming months on gasoline prices, projecting an overall average pace of 2.3 percent this year will return to near the bank’s 2 percent target in 2019.
The Bank of Canada has raised interest rates three times since July, and Governor Stephen Poloz has warned rates are bound to continue climbing given the economy is close to its potential. Future hikes by policy makers will be determined by factors including U.S. trade policy, Canada’s ability to cope with higher borrowing costs and whether inflationary pressures accelerate more quickly than expected.
- The average of the Bank of Canada’s three key core inflation measures rose to 2.03% in April, the highest since 2012, from 1.97% in March. Core inflation measures were revised down for previous months
- The “common” core rate was unchanged at 1.9%. The “median” core rate rose to 2.1% from 2%. The “trim” measure was up to 2.1% from 2%
- Inflation for services was 2.3% in April, down from a 2.7% pace in March, led by slower gains in the cost of airline travel. Goods inflation was 2.1%
- On a monthly basis, overall prices were up 0.3%, in line with economist expectations
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