OTTAWA (Reuters) — Canada's annual inflation rate cooled to 0.8 per cent in April, making for the smallest increase since October 2013, due to cheaper energy, data from Statistics Canada showed on Friday.
That brought inflation below the lower end of the Bank of Canada's one to three per cent target range and fell short of economists' forecasts for one per cent.
Still, it was broadly in line with the central bank's forecast that weaker energy prices could temporarily pull inflation down before the rate returns to 2.0 per cent in 2016.
The core rate, which strips out volatile items and is closely watched by the bank, was firmer than the overall rate, edging down to 2.3 per cent from 2.4 per cent in March.
The energy index fell 13.5 per cent, its biggest decrease since September 2009 due to lower prices for natural gas, gasoline and fuel oil.
Overall, prices rose in seven of the index's eight main components, led by a 3.6 per cent increase in the cost of food.
Transportation was the only major component to decline, falling 4.2 per cent on the decline in gasoline prices.
On a monthly basis, overall consumer prices decreased 0.1 per cent, while core rose 0.1 per cent.