Good news: after a slight uptick in October, Canada’s overall inflation rate declined in November. Statistique Canada reported this morning that the Consumer Price Index (CPI) rose by 1.9% year over year last month. This represents a slight decrease from the 2.0% increase observed in October (see chart below).
Even better, excluding energy, the inflation rate fell from 2.4% in October to 2.1% in November.
This gives the Bank of Canada some room to maneuver (which, incidentally, relies more heavily on inflation measures that exclude the most volatile components such as energy when setting monetary policy) to potentially carry out another cut to its policy interest rate. This is therefore a positive signal ahead of the next announcement, scheduled for January 29.