TORONTO (Reuters) – Canada’s annual inflation rate rose to 3.4% in December from 3.1% in November, data showed on Tuesday, largely driven by higher gasoline prices. The inflation matched estimates by economists polled by Reuters.
One of the Bank of Canada’s core measures of underlying inflation, CPI-trim, edged slightly higher to 3.7%, while CPI-median stayed at 3.6%.
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COMMENTARY
DEREK HOLT, VICE PRESIDENT OF CAPITAL MARKETS ECONOMICS, SCOTIABANK
“There is no way the Bank of Canada is cutting along the market timeline is the bottom line I think. The key is the month-over-month annualized core measures, 4.7% for the weighted median, 4.8% for the trimmed mean – the bank is nowhere close to achieving its 2% inflation target.”
“I think an awful lot has to go right even to get to the consensus call for cutting to begin by summer, let alone anything by March or April.”
ANDREW KELVIN, CHIEF CANADA STRATEGIST AT TD SECURITIES
“With the acceleration in core inflation… I really think it speaks to the fact that the Bank of Canada still has some progress that they need to see in order to consider lowering interest rates.”
“What this report does is it provides a sort of handy reminder that the BoC probably needs to be a little bit cautious before considering loosening monetary policy just given that there are still some underlying inflationary impulses in the economy.”
(Reporting by Nivedita Balu, Fergal Smith; Editing by Denny Thomas)
