Gas Prices Ease Canadian Inflation Strain Despite Rising Essentials

Canada's inflation rate slowed in January as gasoline prices dropped significantly, counteracting the rise in food and clothing costs. The Consumer Price Index (CPI) remained steady compared to the previous month, while food costs surged primarily driven by restaurant prices. The Bank of Canada regards inflation as stable.

Canada witnessed a slowdown in its annual inflation rate in January, supported by a notable drop in gasoline prices, which mitigated the impact of heightened food and clothing costs, reported Statistics Canada.

The Consumer Price Index rose by 2.3% in January, falling short of analysts' expectations of a 2.4% rise. This steady pace from December was largely due to decreased gasoline prices, making it the largest contributor to inflation deceleration, according to StatsCan.

While food prices rose significantly, largely from restaurants, other sectors like alcohol and clothing saw increases, partly due to last year's sales tax break. The Bank of Canada remains confident in the stability of inflation around its target range, halting rate cuts at 2.25%.

(With inputs from agencies.)