By The Canadian Press

Weaker pump prices help inflation cool to lowest reading in a year

Dec 19, 2018 | 6:23 AM

OTTAWA – The annual pace of Canadian inflation slowed considerably last month to 1.7 per cent as upward pressure from higher gasoline prices eased off.

Statistics Canada’s latest inflation number was the weakest year-over-year increase since January 2018 and far cooler than the reading of 2.4 per cent for October.

Economists had expected a rate of 1.8 per cent, according to Thomson Reuters Eikon.

The inflation rate for Alberta was 1.7 per cent, down from 2.8 per cent in October.

Statistics Canada says pump prices contracted 5.4 per cent compared with a year ago because of a drop in global oil prices. Excluding gasoline, the inflation rate would have been 1.9 per cent.

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The average of the agency’s three core inflation readings, which omit more-volatile items like gas prices, slowed to 1.9 per cent last month from two per cent in October. All three core readings now sit at 1.9 per cent — below the ideal two per cent target of the Bank of Canada.

The central bank pays close attention to core inflation ahead of its interest-rate decisions. The weaker reading will likely add to the argument that governor Stephen Poloz should leave his benchmark rate unchanged at next month’s policy meeting.

(The Canadian Press)

by The Canadian Press

Weaker pump prices help inflation cool to lowest reading in a year

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