The Bank of Canada last week published a summary of its deliberations for its June 5 rate decision, which revealed discussion about waiting longer to lower interest rates before ultimately deciding to move on cuts.
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“While they recognized the risk that progress could stall — as it had in the United States — there was consensus that with four consecutive months of easing in core inflation and indicators suggesting continued downward momentum, there had been sufficient progress to warrant a first cut in the policy rate,” the summary said.
The summary reiterated the central bank’s cautious approach and that it plans to take future interest rate decisions one at a time.
The Bank of Canada has been particularly encouraged by the recent slowdown in core measures of inflation, which gauge underlying price pressures and help the central bank track where inflation may be headed next.
For consumers, the slowdown in inflation means smaller price increases while shopping, including at the grocery store.
In April, grocery prices grew at a modest pace of 1.4 per cent annually, down significantly from the double-digit food inflation consumers were once experiencing.
“Grocery prices are still very high. No doubt about that. But they’ve really stopped rising overall and so grocery has actually gone from being a really big challenge for inflation to being a bit of a helping hand,” Porter said.
