Canada’s annual inflation rate in May accelerated more than expected to 3.2 per cent, a 29-month high, data showed on Monday, as the impact of higher crude oil prices due to the Iran conflict continued to filter through gasoline costs.

Analysts polled by Reuters had estimated the annual inflation rate to touch 3 per cent in May, up from 2.8 per cent in April.

The prices, however, are already showing a major reversal in June after an interim peace deal was signed between the United States and Iran last week, which, analysts have said, could help ease the headline number in June.

Statistics Canada said excluding the impact of gasoline prices, the consumer price index still posted a higher increase of 2.2 per cent in May from 2 per cent in April led by elevated cost of food, recreation and alcoholic beverages.

The monthly inflation rate rose to 1 per cent in May, exceeding expectations of 0.8-per-cent rise. This is the highest monthly rise in 15 months.

Gasoline prices in May rose by 33.2 per cent on a year-over-year basis. Consumers in May shelled out more for gasoline than from its previous peak four years ago when Russia invaded Ukraine, StatsCan said.