Interest Rates Will Rise in June (?).

Not so fast says the latest inflation data. Inflation was expected to drop off a bit after the Olympic bump, but not to fall as much as it did. The agency said the big reason for the drops in both annual indexes was that the price-distorting Olympics ceased being a major contributor to inflation with the conclusion of the Winter Games at the end of February.

Inflationary pressures in Canada eased considerably last month, putting into question expectations that the Bank Of Canada will be raising interest rates in a matter of weeks.

Statistics Canada reported Friday that Canada's annual inflation rate slipped by two-tenths of a point to 1.4 per cent, and the closely watched Bank of Canada core rate fell even further – by four-tenths of a point to 1.7 per cent in March.

On a month-to-month basis, Canadians saw no increase in overall prices between February and March.

Prices for traveller accommodation soared 64.1 per cent in February, but in March they dropped back to earth to a more tame 2.8 per cent increase from March 2009.

Full Globe and Mail article