The Financial Post reports in its Saturday, Jan. 19, edition that Canada's annual inflation rate saw an unexpected acceleration to 2 per cent last month as higher costs for airfares and fresh vegetables offset cheaper prices at the pump, Statistics Canada said Friday.
A Canadian Press dispatch to the Post reports that year-over-year prices picked up their pace in December after inflation was just 1.7 per cent in November. A consensus of economists had expected inflation to register 1.7 per cent for December.
However, even as overall inflation advanced at a faster clip last month, the average of three core inflation readings remained flat at 1.9 per cent, close to the Bank of Canada's ideal 2-per-cent target.
Experts believe Friday's core figures mean there is no inflation-fuelled urgency for the BOC to raise its trend-setting interest rate.
Accordingly, National Bank of Canada economist Matthieu Arseneau says this gives the BOC breathing room, so it "can be patient in the coming months." Core inflation, which excludes more-volatile components like gasoline, is the BOC's preferred measure. TD economist Brian DePratto sees "few signs of fundamental inflationary pressure at the moment."
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