OTTAWA – Canada’s annual inflation rate rose as expected in December, data showed on Tuesday, and underlying prices pressures remained, dashing hopes that the central bank would shift into rate-cut mode early this year. Annual inflation rose to 3.4% in December from 3.1% in November, Statistics Canada said. On a monthly basis, consumer prices matched expectations as well and fell 0.3% from November. Two of the Bank of Canada’s (BoC’s) core measures of underlying inflation, CPI-trim and CPI-median, accelerated, with the three-month annualized rate of the two rising to 3.6% from an upwardly revised 2.9% in the prior month, according to Royce Mendes, head of macro strategy for Desjardins Group. “The stickiness in these core measures of inflation comes as a disappointment to Canadians hoping to see enough progress today to open the door to rate cuts,” Mendes said.

Related coverage in the Financial Post: Inflation data ‘clear setback’ for Bank of Canada