OTTAWA – Canada’s annual inflation rate was up to 1.9% in January from the previous month, reducing the impact of sales tax deferrals on wider consumer prices due to higher gasoline and natural gas costs, official data was shown on Tuesday.
The core measurements of the consumer price index have not fallen as fast as inflation in the past few months, but have been bordered.
The January CPI Reading scored a six-month record of inflation below 2%, the midpoint of the Bank of Canada’s 1% to 3% target range, but the underlying price was the currency swap market Reduced bets. Interest rates will be reduced next month.
They now find that there is almost a 63% chance of a reduction in the NO rate in March, compared to 56% before January’s inflation data was published. pretty.
Tuesday’s annual inflation reading coincided with analyst forecasts voted by Reuters. In December, inflation was 1.8%. Prices rose 0.1% per month in January, according to Statistics Canada.
The government announced sales tax holidays on a variety of products, including food, beverages, restaurant meals and children’s clothing, from mid-December to mid-February, helping to ease inflationary pressures.
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Prices for food components in CPI baskets fell 0.6% year-on-year in January. This is the first annual decline since May 2017, due to a record 5.1% decline in food purchased from restaurants.
Without the tax credit, consumer prices would have risen at a 2.7% tax rate, Statscan said. In December, prices rose 2.3%, excluding tax credits.
The Canadian dollar weakened on Tuesday, falling 0.13% at 1.4199 to trade the US dollar, or 70.43 US Cents.
The two-year government bond yield rose 6.8 basis points to 2.797%.
Economists say the sales tax credit has skewed overall inflation numbers, saying that its core inflation is a more accurate measure of consumer price trends.
The BOC has two preferred measures of core inflation: CPI Median and CPI-Trim.
CPI Median – or the central component of the CPI basket when placed in the order of price increases has risen to 2.7% from an upward revision in December. CPI-Trim excludes the most extreme price changes, up to 2.7% from 2.5% in the previous month.
Upper pressure on inflation in December led to a jump of 8.6% of the price Canadians paid with the fuel pump, Statscan said.
This was further increased due to a 4.8% increase in natural gas prices and an eight-month year-on-year rise in passenger car costs.
With prices below the 2% target of BOC staying, the central bank was able to ease the most aggressive rates among the G7 countries. Last month we reduced our major policy rate to 3%.
