FX.co ★ Canada Inflation Rate Holds Below BoC Target

In May 2025, Canada's annual inflation rate remained steady at 1.7%, consistent with market predictions and unchanged from April. This marked the second consecutive month where inflation was below the Bank of Canada's 2% target, a trend influenced by the recent elimination of the federal consumer carbon tax. The price growth for shelter moderated to 3% from 3.4% in the previous month, with rent inflation easing to 4.5% from 5.2% and mortgage interest costs declining to 6.2% from 6.8%, aligning with reduced interest rates set by the Bank of Canada. Additionally, food prices saw a deceleration, registering a growth rate of 3.4%, down from 3.8%. Furthermore, the median and trimmed-mean core inflation rates, which are closely monitored by the central bank, decreased slightly to 3% from last month's 3.1%, meeting anticipated figures and halting their recent upward trend. On a month-to-month basis, the Consumer Price Index (CPI) in Canada rose by 0.6%, recovering from the 0.1% drop recorded in April.