Annual inflation rate fell to 5.9% in January despite grocery prices

Canada’s annual inflation rate fell to 5.9 per cent in January despite grocery prices rising even higher.

Statistics Canada’s consumer price index was released today, it says inflation fell from 6.3 per cent last month.

The agency says inflation will continue to decrease because of base-year effects, which refers to the the impact of price movements from a year ago based on the numbers of the year-over-year inflation rate.

However, grocery prices for meat, bakery goods and vegetables remain high as it grew faster last month, with prices up 11.4 per cent compared with a year ago.

READ MORE: Annual inflation rate fell to 6.3% in December: StatCan

February 2022 was the last time Canada’s annual inflation rate sat below six per cent.

The Bank of Canada raised its key interest rate by another quarter-percentage point last month, bringing it to 4.5 per cent, the highest it’s been since 2007 – it was raised eight consecutive times since March.

On a month-over-month basis, higher gas prices in January increased the consumer price index compared with December.

On the other hand, consumers spent less for cellular services in January compared with a year ago due to the extension of Boxing Day deals into last month.

READ MORE: Bank of Canada raises key interest rate by a quarter point to 4.5%