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Canada Inflation January 2023

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.

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