Record Low Core Inflation

By Elli Davis, March 23, 2011

Here is some very positive economy news from Statistics Canada: inflation data from February is better than expected! The core inflation rate, excluding eight of the most volatile items, went down to the lowest level since 1984, the year when Statistics Canada began tracking the index.

Balloon inflation by Graham McLellan

The overall annual inflation rate went down as well, from the 2.3 per cent recorded in January, to 2.2 per cent last month. As for month-to-month changes, consumer prices increased by 0.3 per cent, mainly due to gasoline and energy prices — just like in January. In Ontario, the inflation rate decelerated as well. It advanced by 2.5 per cent over the year, down from the 2.9 per cent year-to-year rise recorded in January. The situation was similar in the city of Toronto, where the February inflation rate rose by 2.4 per cent — a little less than the 2.6 per cent increase recorded in January.

This news could influence the Bank of Canada’s decision to raise interest rates. There’s no great pressure to hike the rates now, which is great.

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