Excluding gasoline and seven other volatile items, the so- called core index, prices jumped 2.4 percent in November from a year earlier after a pace of 1.7 percent in October, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg predicted the rate would slow to 1.6 percent.
A weakening currency is fueling prices for imported goods even as prices for gasoline drop. Canada's dollar depreciated 21 percent against its U.S. counterpart in the year leading to November, Statistics Canada said. Bank of Canada Governor Mark Carney on Dec. 9 lowered his key interest rate by a quarter point to a half-century low of 1.5 percent, saying he would likely take more action amid slowing inflation and growth.
The bank's policy makers set interest rates to keep inflation between 1 percent and 3 percent, with an optimal target of 2 percent.
Including all items, annual inflation slowed to 2 percent from 2.6 percent on falling gasoline prices, though that rate was faster than economists' prediction of a 1.5 percent pace. From October, consumer prices fell 0.3 percent, less than the 0.8 percent economists expected.
On a monthly basis, core consumer prices unexpectedly increased 0.7 percent, with economists predicting a decline of 0.1 percent for that index.
Fresh vegetables, most of which are imported, jumped 20 percent during the month of November, Statistics Canada said, while the cost of purchasing a passenger vehicle increased by 7.2 percent. Gasoline prices fell 21 percent in November from the month before.
Food prices, up 7.4 percent over the past 12 months, are increasing at their fastest pace since 1986, the agency said.