Interest rate cut less likely after inflation data
Talk of a further cut in interest rates has been fading in recent weeks and yesterday’s inflation figures from Statistics Canada may just kill them off. Prices rose by 1 per cent in January, down from 1.5 per cent in December. The sluggish increase was largely down to gasoline prices which have fallen nearly 27 per cent in the year to January. Without gas prices inflation was 2.4 per cent in the year to January. The largest price rises were in food, alcohol and tobacco products. The Bank of Canada will announce their decision on interest rates next Wednesday but most economists now agree that a further cut would be very unlikely.