Yahoo Finance Canada

Inflation in Canada slows with 2.9% increase in January, keeping June rate-cut expectations on track

Alicja Siekierska
Updated Tue, February 20, 2024 at 3:40 p.m. EST · 4 min read

Canada’s annual rate of inflation slowed more than economists expected in January, with prices rising 2.9 per cent, as food price growth slowed and gas prices fell.

Economists had expected the Consumer Price Index (CPI) to dip from 3.4 per cent in December to 3.3 per cent in January, according to Reuters.

Statistics Canada said on Tuesday that January's annual deceleration was driven by lower year-over-year prices for gasoline. Excluding gasoline, the Consumer Price Index (CPI) slowed to 3.2 per cent in January.

The deceleration brings inflation back within the Bank of Canada's target range of between one and three per cent. The central bank's measures of core inflation also slowed in January, a sign that underlying price pressures are easing.

Economists widely expect the central bank to begin cutting rates later this year. Bank of Canada Governor Tiff Macklem said last month that the central bank needs "more assurance" that inflation is losing steam before it will consider easing monetary policy.

{snip}