Canadian consumer price inflation remained subdued in December
with prices rising just 0.8 per cent, the same increase that was registered in
November. The Bank of Canada's core inflation index, which excludes the
eight most volatile components of the CPI like energy and food, rose just 1.1
per cent year-over-year in December, a moderate deceleration from
November. Inflation in BC registered only 0.4 per cent year-over-year.
Core inflation continues to trend well below the Bank of Canada's two per cent
target rate which suggests that the Canadian economy is still operating with a
substantial amount of excess supply. Very low inflation no doubt contributed to
the Bank's easing of its rate tightening bias earlier this week, pushing a
potential increase in interest rates from 2013 into 2014.
Copyright BCREA - reprinted with permission
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