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

Atamanenko brothers explore their roots at travel and dessert night series

The general public is cordially invited to the next installment

B.C. minister says rural internet is ‘railroad of the 21st century’

Jinny Sims talks details about the $50-million provincial and possible $750-million federal funds

Climber shares local waterfall climbing experience

‘For me, everyday climbing is a great day.’

Annual Guide to Williams Lake released

The guide covers the entirety of the Cariboo-Chilcotin Coast region

IT’S OFFICIAL: Mt. Timothy sale complete

New owners looking toward year-round mountain resort facility

B.C. resident baffled about welcome mat theft

Security footage shows a woman and her dog taking the mat from the property on March 13

Trans Mountain court hearing: B.C. says it won’t reject pipelines without cause

Canada says the proposed amendments to B.C.’s Environmental Management Act must be struck down

Carfentanil found in 15% of overdose deaths in January: B.C. coroner

Carfentanil is 100 times more powerful than illicit fentanyl and used to tranquilize elephants

B.C. father fights for his life after flu turns into paralyzing condition

Reisig has lost all motor skills with the exception of slight head, shoulder and face movements.

B.C. wildfire prevention budget bulked up as dry spring unfolds

Night vision goggles tested for early detection effort

Vernon ordered to reinstate terminated firefighters caught having sex at work

City believes arbitration board erred, exploring options

Dozens of B.C. temperature records smashed as spring brings early warmth

Squamish Airport was the hottest spot in all of Canada on Monday

Hackers seek holes in B.C. Hydro power grid, auditor says

System meets standards, but local outages still a concern

B.C. RCMP stop cyclist with no helmet, find out he’s wanted for murder

Kyle Antonio Dias, 19, to face second-degree murder charge in Toronto

Most Read