OTTAWA, June 19 (Reuters) - The Bank of Canada's governing council mulled the merits of waiting for an extra month to start cutting interest rates before it decided to ease monetary policy on June 5, minutes of the meeting published on Wednesday showed.

The central bank took the widely expected decision to trim its key overnight rate by 25 basis points to 4.75% earlier this month - the first amongst the G7 countries to do so - and cited progress in bringing down inflation.

"Given the risks to the inflation outlook, members considered the merits of waiting for additional monthly CPI data to gain further assurance before reducing the policy rate in July," the minutes said.

"While they recognized the risk that progress (on easing inflation) could stall ... there had been sufficient progress to warrant a first cut in the policy rate," they continued.

The bank's move - the first cut in four years - was closely followed by the European Central Bank which also trimmed its benchmark rate by 25 basis points, to 3.75%.

Money markets are expecting a 64% chance of another rate cut in July and a total of three 25 basis point cut this year.

The minutes showed the six-member council agreed any further easing would be gradual as inflation was only forecast to slowly move down to the bank's 2% target.

Canada's annual inflation rate slowed to a three-year low of 2.7% in April, marking four consecutive months of below 3%. The core measures of inflation - which are closely tracked by he bank - also continued to ease.

The bank would continue to closely watch the evolution of core inflation and remain focused on the balance of supply and demand in the economy, corporate pricing behavior, inflation expectations and wage growth, it said.

"Some members were more focused on the downside risks to inflation stemming from a weak economy and the continued effects of restrictive monetary policy," said the minutes.

"Others put more weight on the upside risks associated with persistence in wage growth and the potential for a housing market rebound."

The BoC's next monetary policy decision is scheduled for July 24, when it will also update its economic forecasts.

(Reuters Ottawa bureau)