Canada’s inflation rate slowed to 5.9% in January, but food costs continue to rise | CBC News

Canada’s inflation rate slowed to 5.9 per cent in January, Statistics Canada said on Tuesday.

That number was lower than the 6.2 per cent that economists were expecting. However, the price of groceries continued to accelerate at a faster pace than in December, the statistics agency reported.

Mortgage interest costs continued to rise, clocking in at 21.2 per cent in January as the Bank of Canada tries to tame inflation with high interest rates. It marks the largest increase since September 1982.

Given much of the acceleration in inflation happened in the first half of 2022, the federal agency says headline inflation will continue to slow because of base-year effects.

A base-year effect refers to the impact of price movements from a year ago on the calculation of the year-over-year inflation rate.

The last time Canada’s annual inflation rate was below six per cent was in February 2022, when it was 5.7 per cent.

No slowdown in cost of groceries 

Meanwhile, grocery prices rose faster last month, with prices up 11.4 per cent compared to a year ago. The federal agency said prices for meat, bakery goods and vegetables all rose faster.

On a monthly basis, higher gas prices in January drove up the consumer price index compared with December. The federal agency said the consumer price index rose 0.5 per cent in January after declining by 0.6 per cent a month prior.

Meanwhile, consumers paid less for cellular services in January compared with a year ago as Boxing Day deals extended into last month.

The prices for passenger vehicles also slowed on a yearly basis, partly reflecting base-year effects, given the availability of vehicles was impacted by supply chain problems a year ago.