---
title: "Canada's CPI further declines, increasing expectations for the central bank to cut interest rates next week"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/225699772.md"
description: "Canada's CPI annual rate in December fell to 1.8%, lower than expected and down from 1.9% in the previous month. Sales tax relief measures led to a decrease in prices for alcoholic beverages, restaurant food, and children's clothing, with CPI declining by 0.4% month-on-month. This measure will last until mid-February and may prompt the central bank to cut interest rates next week"
datetime: "2025-01-21T13:42:21.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/225699772.md)
  - [en](https://longbridge.com/en/news/225699772.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/225699772.md)
generator: "portal-rs"
---

# Canada's CPI further declines, increasing expectations for the central bank to cut interest rates next week

Data shows that Canada's CPI continued to rise at a slower pace in December, thanks to the sales tax relief measures implemented from mid-month, which lowered the prices of alcoholic beverages, restaurant food, and children's clothing. Statistics Canada reported that the annual rate fell to 1.8%, slightly below expectations and down from 1.9% the previous month; it decreased by 0.4% month-on-month. Year-on-year, prices of alcoholic beverages purchased from stores fell by 1.3%, and prices of food purchased from restaurants dropped by 1.6%. The sales tax relief measures affected one-tenth of the components in the CPI basket and will last until mid-February, with January being completely tax-free for a month, unlike December, which had only 18 days. The further decline in inflation in December may prompt the central bank to cut interest rates again next week, although Bank of Canada Governor Tiff Macklem stated last month that any further rate cuts would be gradual

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> **Disclaimer: This article is for reference only and does not constitute any investment advice.**