Inflation cooled for a second month in a row in B.C., rising at a rate of 6.6 per cent annually in December compared with 7.3 per cent in November.
This comes as the Bank of Canada has hiked its key rate seven times since March in a bid to tamp down on surging prices across the country.
But Tuesday’s data from Statistics Canada also reveals December marked the sixth straight month in which the rate of inflation outpaced the national rate, which tallied in at 6.3 per cent.
Most of the relief was driven by falling gas prices, which saw their biggest decline since April 2020, when much of the country went into lockdown at the outset of the pandemic.
There was also a tiny bit of relief on the grocery aisles, with prices rising at a rate of 11 per cent in December compared with 11.4 per cent in November.
But fresh veggies (+13.6 per cent) and baked goods (+13.5 per cent) continued to push prices upwards. A fresh tomato, for example, cost 21.9 per cent more last month than it did one year earlier.
TD Bank economist Rishi Sondhi said in a note in December that B.C. and Ontario can expect inflation to be “more persistent” in 2023 as they continue to deal with high housing costs even as the price of homes take a hit.
“Underlying price pressures remain sticky for now. While the direction of inflation is at least mildly encouraging, there's nothing in this report to keep the Bank of Canada from hiking rates another 25 [basis points] at next week's policy meeting,” Benjamin Reitzes, BMO's managing director of Canadian rates, said in a note.
The current key rate sits at 4.25 per cent.
“We expect the cooling process to continue but it will require consumer spending to effectively grind to a halt,” TD Bank senior economist Leslie Preston said in a note.
“Despite signs from the consumer and business surveys that Canadians are tightening their belts as they brace for recession, the battle against inflation has not turned enough for the [Bank of Canada] to declare victory.”
TD Bank is also forecasting that the central bank will hike its key rate by 25 basis points on Jan. 25.
B.C. inflation compared with the national average:
- July: 8 per cent (B.C.) vs. 7.6 per cent (Canada)
- August: 7.3 per cent (B.C.) vs. 7 per cent (Canada)
- September: 7.7 per cent (B.C.) vs. 6.9 per cent (Canada)
- October: 7.8 per cent (B.C.) vs. 6.9 per cent (Canada)
- November: 7.3 per cent (B.C.) vs. 6.8 per cent (Canada)
- December: 6.6 per cent (B.C.) vs. 6.3 per cent (Canada)