Economists will be sorting through plenty of noise in the annual inflation figures when Statistics Canada releases fresh price data for December on Monday.
A Reuters survey of economists expects the annual inflation rate held steady at 2.2% in December, according to LSEG Data & Analytics.
BMO economist Benjamin Reitzes says he expects inflation ticked up to 2.3% in December despite a heavy drop in gasoline prices last month.
Reitzes says the end of the year is usually a season for discounts but prices dropped more sharply in December 2024 when the federal government’s temporary “tax holiday” took effect mid-month and cut prices on a range of household goods.
He says that’s going to show a jump in grocery prices in the annual comparisons and recent producer price trends suggest food inflation will keep accelerating in the months ahead.
Reitzes says the December inflation figures are “unlikely” to shift the Bank of Canada from the sidelines at its first interest rate decision of the year later this month.