In January, inflation in Canada decreased to 5.9% from 6.3% in December. This decline was driven by lower prices for cellular services and passenger vehicles. These figures are slightly lower than what economists had predicted, with many expecting inflation to be at 6.1%.
Inflation rate in Canada decreased in January
The lower inflation rate supports the Bank of Canada’s decision to pause interest rate increases for the time being. However, homeowners with mortgages are unlikely to see any relief as mortgage rates are continuing to rise.
Additionally, food prices continued to rise in January, with a year-over-year increase of 10.4% compared to 10.1% in December. This could have an impact on Canadians’ overall cost of living.
Food prices continued to rise in January, impacting Canadians’ overall cost of living.
Overall, while the decrease in inflation is a positive development, the continued rise in mortgage and food prices could offset some of the benefits. The Bank of Canada will likely continue to monitor the situation closely and adjust its monetary policy accordingly.