Loonies are pictured in Vancouver, Sept. 22, 2011. THE CANADIAN PRESS/Jonathan Hayward

Lower gas prices help Canada’s inflation rate slow to 1.4% in January

Excluding gasoline, the agency said inflation was 2.1 per cent last month

The country’s annual inflation rate decelerated last month to 1.4 per cent in January in large part because of lower prices at the pump, Statistics Canada said Wednesday said in a new report.

Year-over-year growth in consumer prices slowed following the two per cent reading for December, the agency said in its latest consumer price index report.

Economists on average had expected an increase of 1.5 per cent for January, according to Thomson Reuters Eikon.

Across the country, Canadians paid 14.2 per cent less last month for gasoline compared with a year earlier, 9.2 per cent less for computer devices and 3.2 per cent less for traveller accommodation. The report also said prices for fuel oil fell 3.3 per cent and natural gas dropped 2.3 per cent.

Excluding gasoline, the agency said inflation was 2.1 per cent last month.

The weaker prices in categories like energy offset stronger growth in other areas. Year-over-year prices last month were 13.2 per cent higher for fresh vegetables, 7.8 per cent higher for mortgage interest costs and 5.3 per cent higher at restaurants.

The report also said the average of the Bank of Canada’s three core inflation readings, which omit more-volatile items like gas, held steady at 1.9 per cent in January for a third straight month.

The Bank of Canada has been expecting inflation to edge down below its ideal two per cent target and to stay there throughout 2019, mostly because of lower gas prices.

The central bank, which aims to keep inflation between one and three per cent, can raise its benchmark interest rate as a way to keep inflation from climbing too high. The bank will make a policy decision next Wednesday and it’s widely expected to leave the interest rate unchanged at 1.75 per cent.

Last week, governor Stephen Poloz said the interest rate’s expected upward path to its likely destination range of between 2.5 and 3.5 per cent is “highly uncertain.”

The bank, he said, is watching how several important uncertainties unfold.

Poloz highlighted the unknown evolution of the impacts of higher interest rates on heavily indebted Canadians, how housing markets adjust to higher borrowing costs and stricter mortgage guidelines, whether business investment picks up its pace and the uncertain global trade environment.

Andy Blatchford, The Canadian Press


Like us on Facebook and follow us on Twitter.

Just Posted

UPDATE: West Kelowna fawn euthanized, not claimed by sanctuary

Gilbert the deer has been euthanized after a suitable home was not found in time

Iconic rock photographer Bob Gruen to exhibit work in Kelowna

Gruen’s portfolio includes John Lennon, Bob Dylan, Led Zeppelin, David Bowie, among many others.

Kelowna car thief’s sentencing delayed

Stanley Nickason pleaded guilty car theft charges in B.C. Supreme Court

Alleged impaired driver flips car near Lake Country

The incident happened early Friday morning

July showers wash out half of the Okanagan’s cherry supply

Cherry growers say this is the worst season they’ve seen in decades

Body, burning truck found near northern B.C. town

RCMP unsure if the two separate discoveries are related

Survivorship Dragon Boat Team wins in Vernon

Team takes top spot in A division at festival

Couple found dead along northern B.C. highway in double homicide

Woman from the U.S. and man from Australia found dead near Liard Hot Springs

RDOS contributes funds to arts centre workshop

South Okanagan Performing Arts Centre Society wants input into proposed facility

World-famous sopranos to hold concert in Okanagan

Two Canadian sopranos are bringing their world-famous voices to the Okanagan for one night only

Summerland Fall Fair to include zucchini race

Event is in honour of bobsleigh athlete Justin Kripps

BC Wildfire Service warns wet weather no reason to be complacent

Fire risk currently low for much of B.C. compared to same time over last two years.

Bank of Canada lowers qualifying rate used in mortgage stress tests

Home sales softened last year after the federal government introduced new stress test rules for uninsured mortgages

Most Read