Canada: Inflation falls to lowest level since February 2022 in January
Inflation fell to 5.9% in January from December’s 6.3%. January’s result marked the lowest inflation rate since February 2022, and was below market expectations. Looking at the details of the release, food prices rose at a quicker pace in January compared to the previous month, while price pressures for transportation eased.
Annual average inflation ticked up to 6.9% in January (December: 6.8%). Meanwhile, core inflation fell to 5.0% in January, from December’s 5.4%.
Lastly, consumer prices increased 0.52% over the previous month in January, contrasting December’s 0.58% fall. January’s uptick marked the highest reading since October 2022.
January’s reading increases the chance of the Bank of Canada keeping rates unchanged at its March meeting; indeed, all our panelists currently see the Bank on hold in March.