May 20, 2016 / 12:48 PM / 2 years ago

UPDATE 1-Food, shelter lift Canada April annual inflation rate

(Adds details from report)

OTTAWA, May 20 (Reuters) - Canada’s annual inflation rate rose as expected in April as consumers paid more for food and shelter, bringing the rate closer to the central bank’s target, data from Statistics Canada showed on Friday.

The annual inflation rate was 1.7 percent last month, in line with economists’ forecasts. The core inflation rate, which strips out some volatile items and is watched by the Bank of Canada, was more robust, rising to 2.2 percent.

Nonetheless, the figures were unlikely to change the path of monetary policy as the bank has said inflation is being influenced by temporary factors. The central bank, which has an inflation target of 2 percent, is widely expected to hold interest rates at 0.50 percent when it meets next week.

Overall, prices rose on an annual basis in seven of the consumer price index’s eight major components. Canadians paid 3.2 percent more for food, though the pace of the increase was slightly slower than the month before. The cost of shelter rose 1.4 percent, mainly due to smaller declines for natural gas and fuel oil prices.

The decline in energy prices moderated, with prices down 3.2 percent compared to the hefty annual 7.8 percent decrease seen in March. Excluding energy, inflation rose to 2.1 percent.

Reporting by Leah Schnurr; Editing by Chizu Nomiyama

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