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OTTAWA, June 19 (Reuters) - Canada’s annual inflation rate in May edged up to 0.9 percent from 0.8 percent in April but was still below the lower end of the Bank of Canada’s 1 percent to 3 percent target range, Statistics Canada data indicated on Friday.
Analysts had forecast that the annual rate would stay at 0.8 percent. The Bank of Canada says a slump in crude oil prices will help depress the rate before it returns to 2.0 percent at some point in 2016.
The annual rate increased on the back of food prices, which were 3.8 percent higher than in May 2014. The energy index fell 11.8 percent in the 12 months to May, following a 13.5 percent drop in April.
The core inflation rate, which strips out volatile items and is closely watched by the Bank of Canada, dipped to 2.2 percent in May from 2.3 percent in April, the second month in a row it has dropped. Analysts had expected a core rate of 2.1 percent.
On a monthly basis, overall consumer prices rose by 0.6 percent while core prices advanced by 0.4 percent.