Canada Inflation Surges in December Analysts Reassess Timing for Potential Rate Cuts

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In December 2023, Canada experienced an increase in its annual inflation rate, rising to 3.4% year-over-year from 3.1% in November, as reported by Statistics Canada's Consumer Price Index. The surge was mainly attributed to higher gasoline prices and a significant boost in shelter prices, particularly with mortgage interest costs increasing by 28.6% annually. Despite the overall inflation aligning with economists' predictions, concerns were raised due to unexpected strength in core inflationary measures. This development led to a reassessment of the anticipated springtime interest rate cut by the Bank of Canada (BoC), with experts suggesting a delay in any rate reduction.

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