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

North Island Rising: Minority Rules – Women & Politics

Male politicians continue to out number female politicians in the North Island.

North Island Concert Society reports on a successful season

It was a successful season for the NICS in terms of increased attendance.

Bradshaw’s Photo Highlight: The Merry Widow Mountain trail

“Early morning light is best for photos of the face of the mountain”

Kwakwaka’wakw families march in Port Hardy in honour of MMIWG

Red dresses lined Market Street in honour of Murdered and Missing Indigenous Women and Girls.

20th Anniversary of Family Fishing Weekend coming to North Island

Choice of 14 events held on Vancouver Island and the Gulf Islands

10 facts about Father’s Day

Did you know that the special day for dads was first celebrated in 1910?

B.C. VIEWS: When farmland protection doesn’t protect farmers

Secondary residences aren’t mansions, families tell Lana Popham

Bombers down B.C. Lions 33-23 in season opener

Former Lion Andrew Harris leads Winnipeg with 148 rushing yards

Northern B.C. family remembers murdered Indigenous woman with memorial walk

Still no closure for Ramona Wilson’s family 25 years later

Monkey spotted on late-night jaunt in Campbell River

Conservation officers also apparently looking for cougar in the area

B.C. university to offer mentorship program for former youth in care

Students using the provincial tuition waiver program will soon be able to form a community at KPU

Cyclists competing in one of the toughest bike races on the planet pass through Fernie

Divide riders looking strong as they finish first leg of 4160 km race

You might not know these B.C. records are public

Hired a lawyer to file a civil claim? Those are published online

B.C. bus driver loses case to get job back after texting while driving full bus

An arbitator ruled that Tim Wesman’s phone usage was a “a reckless disregard for public safety”

Most Read