Canadian inflation, as measured by the Consumer Price Index (CPI), slowed for a second consecutive month to 1.7 per cent year-over-year, down from 1.9 per cent in December. The Bank of Canada's three measures of trend inflation were either up or flat in January, and are all now close to 2 per cent. In BC, provincial consumer price inflation was 2.1 per cent in the 12 months to January.
Although total CPI inflation has ticked lower in the past two months, core inflation continues to firm up. The Bank of Canada has a tendency to look past short-term movements in CPI inflation so the most recent downtrend probably will not prompt a shift in thinking at the Bank, at least as long as core inflation moves higher. That means the Bank is still likely to raise its overnight rate at least one more time this year.
Copyright British Columbia Real Estate Association. Reprinted with permission.