OTTAWA – Statistics Canada is set to unveil its consumer price index report for January later this morning. Economists surveyed by Reuters are projecting an uptick in the annual inflation rate, anticipating it to rise to 1.9 percent, based on measures from LSEG Data & Analytics.

Recent trends indicate that inflation in Canada has significantly moderated from peak levels, stabilizing near the Bank of Canada's target rate of 2 percent. Previously, in December, StatCan reported a decrease in the inflation rate to 1.8 percent. This decline was largely attributed to a temporary two-month tax break implemented by the federal government.

The significance of the tax break cannot be overstated; without it, the annual inflation rate for December would have climbed to 2.3 percent. This adjustment illustrates the impact of government policies on economic indicators, particularly in relation to consumer pricing.

In a related context, late last month, the Bank of Canada made a noteworthy announcement regarding monetary policy. The central bank implemented its sixth consecutive interest rate cut, reducing the policy rate by a quarter-percentage point, bringing it down to 3 percent. This development reflects ongoing efforts to curb inflation and stimulate economic growth in a fluctuating economic environment.

This report highlights the dynamic nature of fiscal policies and their direct influences on inflation and interest rates. As the market keenly awaits the upcoming report, the focus remains on how these financial measures will affect Canadian consumers moving forward.

Published originally on February 18, 2025, by The Canadian Press, this information sheds light on the current economic landscape in Canada and offers critical insights for stakeholders monitoring inflation trends and monetary policy adjustments.