The steady upward climb of the consumer price index appears to have eliminated concerns that Canada was moving towards disinflation, but it may be premature, reports Yahoo! Canada Finance.
Bank of Canada governor Stephen Poloz will likely be paying very close attention to the February inflation reading.
Some economists envision the report from Statistics Canada will show the annual CPI dropping below 1 per cent, perhaps even as low as 0.5 per cent. This would mark a significant decrease from January's rate of 1.5 per cent.
As a result, inflation, or lack thereof, will be back on the central bank's radar. The timing is good, as it will coincide with next month's quarterly monetary policy report.
However, it may strike some fear within Poloz, especially if the lack of price pressure indicates that the economy’s output gap is growing wider, or is not closing as fast as it should be.
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