Canada December CPI 2.4% y/y vs 2.2% expected

January 19, 2026

in Forex

Reading Time: 2 mins read

Prior was 2.2percentInflation m/m -0.2% vs +0.1% priorBOC core 2.8% vs 2.9% priorBOC core m/m -0.4% vs -0.1% priorCore CPI % m/m +0.2% vs +0.2% priorCPI median +2.5% vs +2.8% anticipated CPI trim +2.7% vs +2.8% expectedCPI widespread +2.8% vs 2.8% priorEx gasoline +3.0% vs +2.6% prior

The market has been pricing in an opportunity of a price hike this yr and people odds simply ticked a bit increased after this inflation report. Notably, there’s something of a technical change with this report because the HST (Canada’s VAT) tax started in Dec 14, 2024 and that fell out of the calculation.

12 months over yr, increased restaurant costs have been the most important contributor to sooner progress within the all-items CPI, which echos indicators of a robust shopper. Grocery retailer costs additionally rose 5.0% y/y.

USD/CAD dipped about 8 pips on the discharge.

Again in November, headline inflation held regular with a modest 0.1% month-to-month rise, whereas core inflation metrics signaled cooling. Each CPI median and trim decelerated to 2.8%, coming in barely beneath expectations. This downward strain was primarily pushed by decrease costs for journey and lodging, alongside slower progress in lease prices, offering usually constructive information for the Financial institution of Canada.

Nonetheless, these service-sector declines have been offset by rising items costs, most notably on the grocery retailer. Meals inflation accelerated to 4.7% year-over-year—the steepest rise since late 2023—fueled by sharp spikes in staples like frozen beef (+17.7%) and occasional (+27.8%).

Canada CPI yy

Canadian inflation has adopted a dramatic volatility curve since 2021. After surging on account of post-pandemic provide shocks, headline CPI peaked at a generational excessive of 8.1% in June 2022. Aggressive rate of interest hikes efficiently pressured a broad deceleration all through 2023 and 2024, bringing general inflation again close to the two% goal by 2025.

Nonetheless, the “final mile” has confirmed troublesome; whereas headline numbers have stabilized, important prices like groceries and shelter stay stubbornly elevated getting into 2026.

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