Canadian Inflation Slowed to 0.7% in December; Core Falls

(Bloomberg) -- Price pressures in Canada unexpectedly slowed in December, as the nation entered a new wave of lockdowns.

Annual inflation decelerated to 0.7%, from 1% in November, Statistics Canada reported Wednesday in Ottawa. Economists had expected 1%, according to the median estimate in a Bloomberg survey. Core inflation, a better measure of underlying pressure, dropped to 1.57%, down 10 basis points from the prior month.

After climbing to the highest since the pandemic in November, the latest reading shows price pressures are still well below the Bank of Canada’s 2% target. That’s consistent with the view from policy makers that inflation will remain subdued for some time as a second wave of virus cases forces tighter restrictions on businesses and households.

On a monthly basis, CPI fell 0.2% compared with a forecast of a 0.1% increase in a Bloomberg survey.

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