Canadian inflation cooled in January from the month prior, according to Statistics Canada data released on Tuesday.
The consumer price index rose 5.9 per cent from a year ago, Statistics Canada reported Tuesday in Ottawa, slower than the 6.1 per cent gain expected in a Bloomberg survey of economists and down from 6.3 per cent in December. On a monthly basis, the index rose 0.5 per cent in January, versus expectations of 0.7 per cent.
Governor Tiff Macklem explicitly declared a conditional pause last month, saying policymakers would move to the sidelines and assess the impact of their rapid tightening on the economy. Macklem said he expects growth in output to be near zero in the first three quarters of this year, which will allow the economy to move from excess demand to modest excess supply and “relieve inflationary pressures.
Still, the central bank is likely to keep off the hiking path if price pressures continue to ease. Policymakers said the bar for raising rates is now much higher and that they would need to see an “accumulation of evidence” that price pressures and the economy aren’t cooling fast enough to consider another hike.
Higher prices for gasoline, meat and interest costs are among the biggest contributors to price gains last month. The growth in December adds to a flat reading in November and a 1.3 per cent gain in October, ending last year with relatively strong retail sales.
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