Statistics Canada is set to release January inflation data on Tuesday morning as economists predict annual price growth fell again last month.
Inflation is expected to have dropped to 1.7 per cent from 1.8 per cent in December, according to RBC economics, but the decline will likely be attributed to the temporary GST/HST tax holiday.
Experts say the Bank of Canada will continue to focus on “core” measures of inflation, which exclude impacts of indirect taxes and other volatile items, as it weighs inflation concerns with the risks of an economic slowdown in its next interest rate decision in March. These measures have been picking up lately, which could lead the bank to remain cautious about cutting rates.
In a January report, the Bank of Canada highlighted its concern around high shelter inflation, particularly rent and mortgage interest costs.
This is a developing story.
