Canada’s inflation rate was the slowest in more than three years last month, falling outside the central bank’s target band, on falling automobile prices and a moderation in gasoline costs.
The consumer price index rose 0.8 percent in November from a year ago, compared with gains of 1.2 percent in the prior three months, Statistics Canada said today from Ottawa. Core inflation, which excludes eight volatile items, slowed to 1.2 percent from 1.3 percent. Economists surveyed by Bloomberg forecast that the total rate would be 1.1 percent and core inflation would be 1.3 percent.
Inflation has been less than the central bank’s 2 percent target since May even with policy makers keeping their key interest rate at 1 percent to spur growth. Governor Mark Carney reiterated Dec. 4 he may raise interest rates as the economic expansion progresses, at a time when the U.S. and European central banks are easing monetary policy.
The report is “consistent in the near term with policy remaining accommodative,” said Paul Ferley, assistant chief economist in Toronto at Royal Bank of Canada. The central bank would only react to slower inflation if it persisted below 1 percent and prices are likely to accelerate on food costs, he said.
The Canadian dollar weakened 0.5 percent to 99.27 cents per U.S. dollar at 8:45 a.m. in Toronto. Earlier it had touched 99.29 cents, the weakest level since Dec. 7. One dollar buys $1.0074.