OTTAWA (Reuters) - Canada’s annual inflation rate cooled to a more than one-year low in January, weighed by sharply cheaper gasoline prices, data from Statistics Canada showed on Thursday.
The annualized rate dropped to 1 percent last month from 1.5 percent in December. Still, that topped analysts’ forecasts for a decline to 0.7 percent and kept inflation at the lower end of the Bank of Canada’s 1 to 3 percent target range.
It was the lowest level since an annualized 0.9 percent rate seen in November 2013, the agency said.
Core inflation, which strips out volatile items and is closely watched by the Bank of Canada, suggested underlying inflation was not as muted, holding steady at 2.2 percent.
Gasoline prices slumped 26.9 percent in the 12 months leading up to January, steeper than December’s 16.6 percent drop. Prices in seven of the eight major components of the index were higher, led by more expensive food and shelter costs.
On a monthly basis, overall inflation fell 0.2 percent, while core inflation rose 0.2 percent.
The Bank of Canada unexpectedly cut rates to 0.75percent in January, citing a threat to economic growth and its inflation targets from the dramatic drop in oil prices. The central bank makes its next rate decision next week.
Reporting by Leah Schnurr; Editing by Bernadette Baum