Canada's Annual Inflation Rate Slowed in January to 1.7%

Cornelia Mascio
Febbraio 23, 2018

OTTAWA-Headline inflation in Canada slowed in January, while measures of underlying prices strengthened to their highest level since mid-2016.

Canada's consumer-price index rose 1.7% on a year-over-year basis in January, Statistics Canada said Friday, following a 1.9% advance in December.

The Bank of Canada's three measures of core inflation were also less muted, with CPI common, which the central bank says is the best gauge of the economy's underperformance, rising to 1.8 percent, the highest since April 2012.

Markets expect the bank to make no change at its next policymaking meeting in March but another rate hike is fully priced in by July. The Bank of Canada has repeatedly stressed it will remain data dependent when considering future rate decisions.

Overall, Statistics Canada's headline inflation reading of 1.7 per cent for January was weaker compared to a 1.9 per cent result in December and 2.1 per cent in November.

The federal agency said the main downward forces on inflation last month were due to cheaper prices for video and digital equipment, electricity and travel tours. Only British Columbia, with 2.1 per cent inflation, and Ontario, with 1.8 per cent inflation, saw bigger year-over-year price increases. The next largest monthly increase happened in Alberta where prices rose 0.7 per cent.

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