CICB Says Stronger-Than-Expected CPI Isn't of Concern to Bank of Canada

09:04 AM EST, 01/19/2026 (MT Newswires) -- Canadian inflation was a little stronger than expected in December, although not by enough to concern the Bank of Canada, said CIBC after Monday's release of the consumer price index.

Headline CPI was -0.2% month over month on a non-seasonally adjusted basis (NSA), or +0.3% seasonally adjusted (SA) and 2.4% year over year, with both of those readings slightly above consensus expectations.

The acceleration in the year-over-year rate was largely due to base effects from a year ago when the temporary GST/HST tax break lowered prices of some goods and services, noted the bank.

That impact was offset slightly by gasoline prices falling more in year-over-year terms than they did in the prior month.

Core measures of inflation were "mixed," with excluding food/energy rising by an above-trend 0.3% SA, but CPI-trim and CPI-Median only seeing marginal monthly increases, added CIBC. An average of four core measures (including CPI-X alongside the already mentioned three) was 0.14% m/m, 2.1% three-month/annualized and 2.65% year over year, which represented slight decelerations versus the prior month.

Because of that, and despite a somewhat stronger than expected headline reading, Monday's data ise still consistent with underlying inflation being close to 2%, and as a result, the bank continues to see no change in the BoC overnight rate throughout 2026.

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