Food prices continue to rise despite easing inflation

Canada’s annual inflation rate fell to 2.8 per cent in June, down from 3.2 per cent in May, largely due to lower gasoline prices.

Excluding gasoline, inflation remained unchanged at 2.2 per cent, suggesting underlying price pressures were relatively stable.

Grocery price inflation also eased, falling to 3.9 per cent from 4.3 per cent. However, food prices continued to rise faster than overall inflation for the 17th consecutive month.

Fresh fruit prices saw slower growth, while chicken, bakery products and frozen foods recorded stronger price increases.

Travel costs also climbed sharply, partly driven by demand related to the FIFA World Cup. Accommodation prices rose by about 20 per cent in Ontario and British Columbia, while airfares increased 9.6 per cent year over year the largest increase in more than three years.

The Bank of Canada has kept its key interest rate at 2.25 per cent for six consecutive meetings as it continues to monitor inflation and geopolitical pressures.