The Globe and Mail reports in its Thursday, Dec. 20, edition that lower gas prices pulled Canada's annual inflation rate in November down to 1.7 per cent, the first time in 10 months it has been below the Bank of Canada's 2-per-cent target, underscoring market expectations that imminent interest-rate hikes are off the table. A Reuters dispatch to The Globe reports that the BOC, which has raised rates five times since July, 2017, as the economy strengthened, said earlier this month that economic data heading into the fourth quarter had been weaker than expected. The BOC, which had predicted lower gas prices would pull down the annual rate, is due to announce its next interest rate decision on Jan. 9 and markets expect no change.
Statistics Canada said on Wednesday that gasoline prices fell by 5.4 per cent from November, 2017, on lower crude prices and overall energy costs dropped by 1.3 per cent over the same period. In both cases, it was the first year-over-year decline since June, 2017.
It also noted that the BOC's three core inflation measurements came in at 1.9 per cent, the first time they have all been below 2 per cent since June, 2018.
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