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

Langley Home Expo shows off home and yard improvements

The annual event is being held in Brookswood at the George Preston Rec Centre

Winner announced in Langley Total Makeover Contest

Cheri McBride thanked friends and family for supporting her

LETTER: Langley cycling lanes sparse and treacherous

Bike to School and Bike to Work week is taking place May 27-31

Public invited to Alzheimer walk in Langley

A Langley seniors complex and a North Langley business group have teamed… Continue reading

OPP looking for suspect after Best Buy credit-card fraud in Surrey

Ontario Provincial Police believe suspect has links to Surrey and Langley

B.C.’s fight to regulate bitumen through pipelines to go to Canada’s top court

BC Appeal Court judges found B.C. cannot restrict bitumen flow along Trans Mountain pipeline

Burnaby facility to dispose of 1,500 tonnes of Canada’s trash from Philippines

All 103 containers will be disposed of properly within Canada before the end of the summer

Scheer says it would take Conservatives five years to balance budget

Scheeraccused the Liberal government of spending $79.5 billion of previously unbudgeted funds

Man wants guilty plea revoked in 2012 collision in Abbotsford that killed Chilliwack woman

Michael Larocque was charged in relation to crash that killed Eileen Kleinfelder

High-risk sex offender released into Surrey

Earon Wayne Giles, a Newton “tag-team rapist,” was released from prison Friday and is now living in Surrey

Vancouver woman sexually assaulted after man follows her home; suspect at large

Police are looking for an Asian man in his 40s after the incident on Vancouver’s east side.

B.C. man, 30, arrested for driving his parents’ cars while impaired twice in one day

The Vancouver-area man was arrested after officers caught him driving impaired twice in one day

UPDATE: Vancouver man dies after crash between motorcycle, transport truck

Police believe speed was a factor in Thursday collision

Trial slated to start Monday for accused killer of Abbotsford cop

Oscar Arfmann faces first-degree murder for death of Const. John Davidson

Most Read