MNI DATA IMPACT: Canada Jan. CPI +2.4% Vs. Forecast +2.3%>

By Greg Quinn and Anahita Alinejad

     OTTAWA (MNI) - Canada's inflation rate quickened to the fastest 

in eight months in January on gasoline and housing.

     The consumer price index climbed 2.4% in January from a year 

earlier, up from December's 2.2% and ahead of the 2.3% MNI economist 

median. Prices rose 0.3% on a monthly basis, the first gain in three 

months, Statistics Canada reported Wednesday from Ottawa. 

     Gasoline prices climbed 11% from a year ago and by 0.4% on the 

month, and excluding that inflation was 2%. The Bank of Canada's three 

core price measures also averaged 2%, matching the central bank's 

target. 

     The report is a key sign the economy is holding close to full 

potential amid global headwinds like trade disputes and the coronavirus 

outbreak. Governor Stephen Poloz said last month he might cut the G7's 

highest policy rate of 1.75% on signs that consumer confidence was 

fading and the economy nearly stalled in the fourth quarter. 

     A long era of low interest rates is already boosting consumer 

demand for big-ticket items, an area the BOC has also said is a concern 

because of a record buildup of debt. 

     Every major driver of inflation in January related housing and the 

cost of owning a car. Mortgage interest costs rose 5.3% from a year 

earlier and car insurance by 8.4%, Statistics Canada said. 

     Other smaller factors pushing up inflation included a 5% jump in 

fresh vegetable costs as bad weather hurt crops in the U.S. and Mexico, 

and provincial taxes on tobacco and carbon emissions. 

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

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