Consumer Price Index - January 25, 2011
BCREA ECONOMICS NOW
Consumer Price Index - January 25, 2011
Canadian inflation advanced at a 2.4% annual rate in December, following 2% inflation in November, with most of the increase due to higher gasoline prices. Consumer prices in BC also rose 2.4% in December on higher gasoline price and an HST induced bump up in restaurant prices. Upward pressure on international food prices is expected to be the main source of higher inflation in coming months, while expectations of flat crude-oil prices in 2011 may help to restrain inflation.
The Bank of Canada’s preferred measure of prices, so-called “core” inflation which excludes volatile energy and food prices, registered a 1.5% increase in December following a 1.4% increase in November. Subdued core inflation to end the year supports our expectation that the Bank of Canada will remain on the sidelines at until at least July of this year.