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

Blaze consumes dwelling in Masset

The Masset Fire Department received the first call around 8 p.m.

All Nations Driving Academy gets $360K boost from province

Terrace-based driving school bridges gap in services for remote northwest B.C. communities

Skeena Watershed reopened for recreational pink and coho

Four sections and tributaries remain closed

Skeena-Bulkley Valley candidates react to finding Trudeau broke ethics law

The election campaign is heating up before the writ has even dropped

Fashion Fridays: How to dress and feel powerful

Kim XO, helps to keep you looking good on Fashion Fridays on the Black Press Media Network

‘Easy Rider’ star Peter Fonda dies at 79

Actor and writer was nominated for an Oscar for co-writing the 1969 psychedelic road trip movie

Bob Lenarduzzi out as Vancouver Whitecaps president

MLS team is at the bottom of the Western Conference standings

B.C. daycare operator denies negligence in death of ‘Baby Mac’

Infant died in early 2017 after biting an electrical cord, according to a lawsuit filed by his mom

BC SPCA reopens animal cruelty investigation at Abbotsford pig farm

Additional alleged footage released from Excelsior Hog Farm sparks new investigation

Donor upset no one noticed B.C. school’s sculpture had been missing for a year

Agassiz’s Fraser River Lodge owner baffled how theft went undetected

Purple fentanyl among items seized in B.C. drug bust

Youth being recruited as drivers for more-established drug dealers, police say

Fatal overdoses in B.C. drop 30% during first half of year

A total of 538 people have died between January and June, BC Coroners Service reports

VIDEO: B.C. RCMP officer’s stunt at motorcycle festival prompts internal investigation

The officer was part of a stunt event at the Squamish Motorcycle Festival

Most Read