StatCan announces surprising trend
Canada’s inflation rate slowed by more than expected in January, with the consumer price index (CPI) rising at an annual pace of 2.9% last month and ticking downwards from December.
New data released by Statistics Canada on Tuesday showed that annual price growth came in lower than the 3.3% expected by economists in a Bloomberg survey, dropping from 3.4% the previous month in a further sign that Bank of Canada rate hikes to date are having their desired impact.
The headline rate of inflation is now inside the central bank’s target range, the first time it’s achieved that since June, with expectations for interest rate cuts down the line now likely to intensify.
The core inflation measures most closely watched by the Bank also fell faster than economists had anticipated, averaging 3.35% in January compared with analyst expectations of 3.6% for the month and 3.6% in December.
Grocery price growth slowed to 3.4% in January, having hit 4.7% the previous month – but unsurprisingly, mortgage interest costs continued to contribute significantly to the overall inflation figure, jumping by 27.4% on a year-over-year basis.
The cost of rent increased by 7.9% compared with the same time last year, while electricity prices were up 11.1%. Still, the cost of telephone services dipped by 11.9%, gasoline cost 4.0% less in January over the same month in 2023, and natural gas prices were also lower by 16.4%.
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