‘A big positive shift’: What economists say about Canada’s inflation numbers

By Gigi Suhanic
The Financial Post
February 20, 2024
Category: Finance & Economics
Region: Canada

Canada’s inflation rate for January decelerated to 2.9 per cent, dropping more than economists were predicting and possibly opening a window for the Bank of Canada to start cutting rates as early as June. …The Bank of Canada will be pleased with January’s inflation report, and not just because the headline rate slowed more than expected, said Olivia Cross at Capital Economics. …Month-over-month core inflation rose 0.1 per cent excluding food and energy, slower than the 0.3 per cent gain in December. The Bank of Canada‘s preferred measures — CPI-trim and CPI-median — both slowed to 3.4 per cent and 3.3 per cent respectively, from 3.7 per cent and 3.5 per cent. …That is “well below” the Bank of Canada’s forecast of 3.2 per cent inflation in its most recent Monetary Policy Report. …“We still anticipate that interest rate cuts will start in June,” Grantham said.

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