Canada’s inflation rate unexpectedly holds at 3.1% in November

OTTAWA (Reuters) – Canada’s annual inflation rate unexpectedly remained at 3.1% in November, as slower growth in food prices and cheaper cellular services and fuel oil were offset by an acceleration in prices of travel tours, Statistics Canada data showed on Tuesday.

Analysts polled by Reuters had forecast inflation to ease to 2.9% from 3.1% in October. Month-over-month, the consumer price index was up 0.1%, compared with a forecast of a 0.1% decline.

Headline inflation is still broadly in line with the Bank of Canada’s projection for it hover around 3.5% until mid-2024, before slowly cooling to the bank’s 2% target by end-2025.

CPI-median and CPI-trim – two of the BoC’s three core measures of underlying inflation – also held steady at 3.4% and 3.5% respectively.

The bank has left rates at a 22-year high of 5% in the three policy-setting meetings and has maintained it is too soon to talk about rate cuts. The bank’s next rate announcement is on Jan. 24.

Prices for food purchased from stores increased 4.7% in November, slower than the 5.4% recorded in October, while energy prices fell 5.7% compared with a 5.4% decline in the month earlier, Statscan said.

Excluding volatile food and energy, prices rose 3.5% compared with a 3.4% year-over-year rise in October.

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