If the holiday season is all about giving, B.C. consumer prices managed to give quite a bit in December.
The province’s inflation rate hit 2% year over year last month compared with 2.6% in November, according to data released Friday (January 26) from Statistics Canada’s Consumer Price Index.
Nationwide, the annual inflation rate made a 1.9% gain in December compared with a 2.1% gain the month before. Excluding volatile gasoline prices, inflation rose 1.5%.
BMO Capital Markets chief economist Douglas Porter highlighted the role price wars between Canada’s wireless providers played in the movement of last month’s inflation numbers.
He noted the country experienced its biggest drop on record for telephone services, falling 7.6% month to month, putting it 5% below prices a year earlier.
“This factor alone chopped 0.2 percentage points from the headline inflation result,” he said in an investors note.
RBC Economics senior economist Nathan Janzen said the firming in underlying price pressures in recent months alongside better wage growth numbers will likely reassure the Bank of Canada that the economy is close to bumping up against long-run capacity limits.
“Risks to the outlook remain, particularly around NAFTA renegotiations, but we expect the stronger economy will ultimately warrant further gradual interest rate hikes from the central bank this year,” he said in a note to investors.
