It’s good news for your budget and might lead to another pause in interest rate hikes.

The latest Statistics Canada consumer price index report says Canada’s inflation rate fell to 3.4-percent 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.

At the same time, grocery prices were still increasing last month, rising 9-percent from last May.

The slowdown in the overall rate comes after annual inflation edged up slightly in April to 4.4-percent, causing concern 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.

Decision makers at the Bank of Canada will be paying close attention to today’s report ahead of its next interest rate decision on July 12th.