UPDATE 1-What low inflation? Canada's rate up to 27-month high

Fri Jun 20, 2014 8:36am EDT
 
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(Adds Bank of Canada context, details on energy prices)

* Overall inflation 2.3 pct in May, 2.0 pct in April

* Core inflation 1.7 pct in May, 1.4 pct in April

* Forecast 2.1 pct for total inflation, 1.5 pct for core

* Inflation exceeds Bank of Canada's forecast and target

OTTAWA, June 20 (Reuters) - Costlier energy unexpectedly pushed Canada's annual inflation rate to a 27-month high of 2.3 percent in May from 2.0 percent in April, while a rise in core inflation also defied the Bank of Canada's low-inflation forecasts.

Statistics Canada reported on Friday that core inflation jumped to 1.7 percent, the highest since July 2012, from 1.4 percent in April. The median forecasts in a Reuters survey of economists were for 2.1 percent inflation overall and 1.5 percent for core, which strips out volatile elements.

  Continued...