Canada’s annual inflation rate rose 1.9 per cent in November, Statistics Canada said on Tuesday, after rising 2 per cent in October. Economists had expected the Consumer Price Index (CPI) to rise at an annual rate of 2 per cent in November, according to a Reuters poll.
Statistics Canada said in a report that slower price growth was broad-based, with travel package prices and the mortgage interest cost index the main contributors to the slowdown. Mortgage interest cost inflation eased for the 15th straight month, rising 13.2 per cent in November from 14.7 per cent in October.
Grocery costs continued to rise faster than overall inflation. Prices of food purchased at stores rose 2.6 per cent in November. Statistics Canada also said that compared with November 2021, grocery prices rose 19.6 per cent.
The inflation report is the first of two reports to be released before the Bank of Canada makes its next interest rate decision on Jan. 29. The central bank has cut its benchmark interest rate by 50 basis points in the last two decisions, with the current policy rate at 3.25 per cent. Since June, the Bank of Canada has cut its policy rate by 175 basis points.
The next few months “will be a period of uncertainty for CPI readings due to the temporary reduction of the GST on some goods.”
“It will be difficult for policymakers to determine the underlying trend of inflation over the next few months, with December’s numbers expected to be affected by the start of the GST holiday in the middle of the month for some goods/services,” Grantham said.
“While the CPI-Trim and Median measures may be less affected by these temporary factors, over this period, the Bank’s assessment of the slack in the economy, including upcoming employment data, will be more important in determining policy decisions.”
The core inflation measure, which rose in October, remained stable in November. The CPI-median was unchanged at 2.6 per cent, while the CPI-trim remained at 2.7 per cent.
On a monthly basis, the CPI was unchanged in November after rising 0.4 percent in October. After seasonally adjusted, the CPI increased by 0.1 percent.
