Canada’s inflation rate holds steady at 3.1%

Canada’s annual inflation rate held steady at 3.1 per cent in November, matching the previous month’s rate, according to data released by Statistics Canada on Tuesday.

Economists were expecting the rate to fall below the three per cent threshold, putting the economy closer to the Bank of Canada’s two per cent inflation goal.

Mortgage interest costs and the high cost of rent remain two of the largest contributors to the inflation rate, and higher prices for travel tours put upward pressure on consumer costs as well. Slower price growth for food, energy and cell services balanced this out.

While the price of groceries continued to rise, they did so at a slower pace compared to the previous year’s rates for the fifth consecutive month in a row — with a few exceptions, including meat, preserved vegetables and sugar, the agency reported.

If volatile food and energy prices are stripped out from the core inflation number, the consumer price index hovered at 3.5 per cent in November.

Canadians are still feeling the pressure at the supermarket. Chloe Daley, who spoke to CBC News outside a Toronto grocery store, said “everything is still the same price. It’s still $2.99 for a cucumber when it used to be $0.99.”

“Even though they’re saying it’s slowly going down. I don’t see a change in anything,” she said. “It’s very hard.”

Though Bank of Montreal chief economist Douglas Porter called the results “moderately disappointing,” he wrote in a note the bigger picture remains that underlying inflation has lowered, the economy is cooling and the Bank of Canada is still expected to start cutting its key interest rate mid-next year.

The Bank of Canada held interest rates steady this month at five per cent for the fourth month in a row, more than a year and a half after beginning its aggressive campaign to cool the economy.

Last week, the central bank’s governor Tiff Macklem said that it was still too soon for the institution to consider rate cuts.