Canada’s annual inflation rate rose to 2.9 per cent in May, driven by services prices

Canada’s annual inflation rate rose to 2.9 per cent in May, largely driven by higher prices for services, Statistics Canada reported on Friday.

The agency reported prices for services rose 4.6 per cent from a year ago as consumers paid more for cellular services, travel and rent. Prices for goods rose one per cent.

Grocery prices rose 1.5 per cent year-over-year in May, a tick higher compared with April, when they rose 1.4 per cent.

The annual inflation rate for April was 2.7 per cent.

The latest consumer price report comes after the Bank of Canada cut its benchmark interest rate by a quarter of a percentage point earlier this month to 4.75 per cent.

Today’s inflation reading, along with the upcoming June inflation data, are expected to play a key role in the central bank’s next rate decision, set for July 24.