OTTAWA — Canada’s annual inflation rate slowed last month but economists are still expecting the Bank of Canada to hike its key interest rate next week.
In its latest consumer price index released Tuesday, Statistics Canada said the country’s annual inflation rate slowed to 6.3 per cent in December. The deceleration came as the cost of groceries continued to soar and gas prices cooled.Sign up to receive daily headline news from the Calgary Herald, a division of Postmedia Network Inc.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc.
The economist expects the strong December jobs report to push the central bank to raise its key rate by a quarter of a percentage point at its next rate announcement on Jan. 25.Article content “I think what’s going on here is that a lot of what we buy in stores is heavily transformed. And there’s been pressures all along the chain,” she said.
As economists try to parse out the direction inflation is headed in, many will be analyzing core inflation closely, as it tends to be less volatile than the headline measure. “While the direction of inflation is at least mildly encouraging, there’s nothing in this report to keep the Bank of Canada from hiking rates another 25 at next week’s policy meeting,” Reitzes said.Article content
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