June 22, 2018 / 12:40 PM / a year ago

UPDATE 1-Canada inflation rate unchanged in May, above central bank target

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OTTAWA, June 22 (Reuters) - Canada’s annual inflation rate stayed unchanged at 2.2 percent in May, the fourth consecutive month it has exceeded the Bank of Canada’s 2.0 percent target, Statistics Canada data indicated on Friday.

The rate was less than the 2.5 percent forecast by analysts in a Reuters poll.

The Bank of Canada has raised interest rates three times since last July as the economy strengthened, and market operators see a 60 percent chance of another hike when the bank announces its next decision on July 11.

Energy prices rose by 11.6 percent from May 2017 - higher than the year-on-year 6.3 percent increase in April - thanks largely to a 22.9 percent jump in gasoline prices. This helped offset the fact that five of the eight major components grew at a slower rate than they had done in April.

All three of the central bank’s core inflation measures came in at 1.9 percent. These include CPI common, which the central bank says is the best gauge of the economy’s underperformance.

Reporting by David Ljunggren Editing by Jeffrey Benkoe

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