BRITISH COLUMBIA – Canadian prices, as measured by the Consumer Price Index (CPI), rose 1.8 per cent on a year-over-year basis in December, down from a 1.9 per cent increase in November. Month-over-month, on a seasonally adjusted basis, CPI increased by 0.2 points in December. Excluding food, the CPI rose 2.1 in December.
Overall, shelter price growth continues to cool, as mortgage interest costs were up 11.6 per cent, marking the sixteenth consecutive month of deceleration. Similarly, rent was up 7.1 per cent in December year-over-year, down from 7.7 per cent in November. Taken together, total shelter costs rose 4.5 per cent in December, down from 4.6 per cent in November. In BC, consumer prices rose 2.6 per cent year-over-year, up from 2.3 per cent in November.
The Bank of Canada‘s preferred measures of median and trimmed inflation, which strip out volatile components, fell to 2.4 and 2.5 per cent year-over-year, respectively.
Canada’s CPI report for December is driven by downward pressure on prices from the GST/HST break on some major components. Many of these goods, including food, clothing, and alcoholic beverages, saw sharp price reductions compared to the previous month, thus explaining the slight downturn in year-over-year inflation measures.
However, we still see some upward momentum on a quarterly basis between both headline and core inflation. Nonetheless, this report is unlikely to sway the Bank of Canada away from its plan to cut the overnight rate by 25 basis points next week.
Source: bcrea.bc.ca
