Inflation on the West Coast took a breather in January after ticking upwards the prior two months.
Statistics Canada reported Tuesday that B.C.’s inflation rate kicked off the year by easing to three per cent. It previously grew by 3.2 per cent and 3.4 per cent in November and December, respectively.
Meanwhile, the national inflation rate cooled to 2.9 per cent last month compared with 3.4 per cent in December.
Airfares (-14.3 per cent), mobile services (-16.4 per cent), and clothing and footwear (-4.1 per cent) were among the big drivers pushing inflation downward on an annual basis.
Rent (+seven per cent) and mortgage costs (+27.4 per cent) were among the top factors driving inflation last month.
BMO chief economist Douglas Porter said the national numbers were “much milder” than expected.
“The Bank of Canada will likely remain cautious in the face of still-strong wage gains, firm services prices and the reality that core inflation is still holding above three per cent,” he said in a note. “But clearly today's result makes rate cuts much more plausible in coming months, and we remain comfortable with our call that the Bank will begin trimming in June.”
TD senior economist Leslie Preston said the weak consumer demand that has prevailing for some time may finally be showing up in prices.
“The BoC is likely to be pleased with the progress on inflation to start the year, but inflation remains too far above target to start cutting rates,” she said in a note. “We expect that price pressures will continue to come off the boil in the coming months, and that the Bank will be ready to cut rates come the spring.”
