Canada's inflation rate falls to 3.4% last month, lowest rate since June 2021

Statistics Canada says the country's inflation rate fell to 3.4% in May – the lowest it's been since June 2021.

The federal agency says the slowdown was largely due to lower gasoline prices compared with a year ago.

Meanwhile, grocery prices were still skyrocketing last month, rising nine per cent from last May.

The slowdown in the headline rate comes after inflation ticked up slightly in April to 4.4%, setting off some alarm bells at the Bank of Canada.

Forecasters were widely anticipating a sharp decline in inflation this year, as price increases slow compared to the rapid run-up in the first half of 2022.

The Bank of Canada will be paying close attention to today's report as it gears up for its next interest rate decision on July 12.