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Gasoline prices led the large decline in consumer energy costs, falling 18.1 per cent year-over-year, the agency said. Prices for natural gas also dipped significantly.Ìý

And, to a lesser extent, prices for clothing and footwear declined from the same time last year.Ìý

ButÌýCanadians generally paid more for food and travel tours. And, while overall inflation is now below the Bank of Canada’s target of two per cent, experts are warning that the bank’s preferred “core” inflation measures, which exclude the impacts of the consumer carbon tax removal, heated up last month.Ìý

This, economists say, complicates the central bank’s upcoming interest rate decision as policymakers try to fight opposing forces: on one hand, rising inflation, and on the other, higher unemployment.Ìý

“Even with tariffs in full swing, inflation in April eased slightly,” Marwa Abdou, research director at the Business Data Lab of the Canadian Chamber of Commerce, said in a statement.Ìý

But,ÌýAbdou cautions, “this dip is only temporary. Persistent core inflation and external trade uncertainties will continue to keep the (central) bank on alert.”Ìý

Prices for groceries increased 3.8 per cent year-over-year in April versus 3.2 per cent in March, led by fresh vegetables, fresh or frozen beef and coffee and tea.

Prices for restaurant meals also rose 3.6 per cent in April compared with 3.2 per cent in March.Ìý

BMO economistÌýDouglas PorterÌýsaid that a recently weak loonie and counter-tariffs on U.S. imports drove food prices higher.Ìý

“The big relief from lower gasoline prices in April masked an unfriendly inflation picture beneath the surface,” he wrote in a note to clients. “Some of that upswing in underlying prices appears related to the simmering trade war, with food and vehicle prices showing some real power.”

Meanwhile, prices for travel tours rose 6.7 per cent in April, after falling 4.7 per cent in March, StatCan said.Ìý

Prior to Tuesday’s release, economists largely expected the annual rate of inflationÌýto have fallen toÌý1.6 per cent fromÌý2.3 per cent in March.Ìý

Excluding energy, inflation was 2.9 per cent in April versus 2.5 per cent in March, according to the report.Ìý

Despite the acceleration in the Bank of Canada’s preferred “core” inflation measures, some economists still believe the bank will cut its key interest rate on June 4.Ìý

“WithÌýthe economy clearly weakening in recent months, lower inflation expectations should keep central bankers on track to cut rates 25 basis points in June,” wrote Desjardins economistÌýRoyce Mendes in a note to clients.Ìý

The experts are especially concerned about April labour market data showing the Canadian unemployment rate reached its highest level since November.Ìý

But others argue the case for cutting is weak.

“No way the Bank of Canada should be cutting,” said Scotiabank economistÌýDerek Holt in a note to clients, adding that markets slashed the odds of an imminent rate cut after Tuesday’s StatCan release.Ìý