MNI DATA IMPACT: Canada 2.2% Core CPI is Fastest Since 2009>

By Greg Quinn and Anahita Alinejad

     OTTAWA (MNI) - Canada's inflation rate quickened to 2.2% in 

November on gains in mortgages and car insurance and core prices 

advanced the most in a decade, supporting the central bank's view of a 

resilient economy. 

     The overall pace of price gains was the fastest since May and comes 

after three months where CPI held at 1.9%. 

     On a month-to-month basis, prices fell 0.1% from October to 

November on travel costs and cheaper gasoline. 

     The average of three core inflation measures tracked by the BOC 

moved up to 2.2% in November from 2.1% in October, and is the fastest 

since 2009. 

     Mortgage interest costs rose 6.6% and motor vehicles by 2.9% in 

November from a year earlier, Statistics Canada reported Wednesday from 

Ottawa. 

     The Bank of Canada has resisted a global wave of rate cuts this 

year citing inflation projected to stick close to a 2% target. 

Governor Stephen Poloz earlier this month said keeping a 1.75% 

policy rate while most other major central banks have cut is 

appropriate for an economy close to full output, even as global trade 

disputes pose a major risk to manufacturing and investment.

     The BOC has also said consumers are vulnerable to a run-up in 

borrowing in an era of low interest rates. This inflation report showed 

again how big-ticket spending linked to debt is driving the economy. 

Along with upward price pressure from mortgages and cars, rent and car 

insurance were the other drivers of faster CPI in November. 

    The headline year-over-year and the monthly inflation rates both 

matched the MNI economist median. 

--MNI Ottawa Bureau +1-613-314-9647; greg.quinn@marketnews.com

     [TOPICS: MACDS$,M$C$$$,MAUDR$]