- Bank of Canada
Canada's inflation cooled the most in nine months in December, confirming the Bank of Canada's concerns over the impact of falling oil prices on the nation's economy. Inflation rate slowed to 1.5%, the lowest level since March, after falling to 2% in the preceding months, according to Statistics Canada. Meanwhile, the core CPI, which strips out volatile components, rose to 2.2%, beating expectations for 2% reading. The BoC Governor Stephen Poloz made an unexpected interest-rate cut on January 21 noting the recent decline in global oil prices would push inflation lower to 0.3% in the second quarter this year. Poloz said the central bank may slash interest rates again if the world's 11th largest economy shows more signs of faltering. Policy makers also expected core inflation would remain close to 2% through next year.
A separate report showed Canada's retail trade surprisingly rose in November, as consumer activity was encouraged by cold weather and promotional sales. Sales ticked up 0.4% to $43 billion, after remaining unchanged in October, Statistics Canada reported. Analysts, in contrast, had projected a decrease of 0.2%. Meanwhile, core retail trade, which strips out volatile automobile and parts sales, advanced 0.7% in November, overshooting market expectations of a 0.1% increase.
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