OTTAWA (Reuters) - Canada’s annual inflation rate crept higher in November to 0.9 percent from 0.7 percent in October but remained below the central bank’s target range, ensuring that chronically weak inflation will remain on policymakers’ radar as a top concern.
The consumer price index (CPI) was flat in the month, Statistics Canada reported on Friday. The annual CPI rate was pushed higher mainly by shelter and food costs, while prices fell for health and personal care as well as for clothing and footwear.
Core CPI, which excludes volatile items like gasoline and food, slipped 0.1 percent on the month for an annual rate of 1.1 percent.
Both the total and core inflation rates were below market expectations of 1.0 percent and 1.2 percent, respectively.
Inflation has been below the Bank of Canada’s 2 percent target for 19 months. For seven of the past 13 months it has been below the bank’s comfort zone of between 1 and 3 percent, Statscan said in its report.
Bank of Canada Governor Stephen Poloz told Reuters in an interview on Tuesday that the central bank is “having trouble explaining” why inflation is so weak, as well as being mystified by poor exports and business investment in the context of an improving U.S. economy.
The bank first explicitly stated an increased concern with inflation in its Oct 23 interest rate decision when it shifted into a neutral monetary policy stance after 18 months of leaning towards rate hikes.
Reporting by Louise Egan and Alex Paterson; Editing by Chizu Nomiyama