Grocery prices have trended mostly upwards this year, say economists at RBC, “consistent with rising agricultural commodity prices over the first half of 2025.” (Photo by Zou Zheng\/Xinhua via Getty Images) \u00b7 Xinhua News Agency via Getty Images <\/p>\n
Canada\u2019s annual inflation rate held steady at 2.2 per cent in November, according to Statistics Canada data published Monday. Economists had expected the inflation rate to rise at a slightly faster pace than October<\/a>, to 2.3 per cent, according to consensus estimates published by CIBC Economics.<\/p>\n Price increases slowed for services, including rent, travel tours and accommodation, but prices were higher for groceries, and the year-over-year decline in gasoline prices was less than in October. The Consumer Price Index (CPI) excluding gas rose 2.6 per cent year-over-year for the third consecutive month.<\/p>\n Grocery prices were 4.7 per cent higher year over year, the largest annual increase since December 2023. The 1.9 per cent increase from October was the largest monthly increase since January 2023, Statistics Canada says. Fresh fruit (up 4.4 per cent year over year) and other food preparations (up 6.6 per cent) were key factors in the rise.<\/p>\n Although gas and grocery prices rose “sharply,” Desjardins Group economist Royce Mendes wrote, “those categories can be very volatile, so there\u2019s not much signal in those moves.”<\/p>\n “The latest inflation numbers point to generally benign price pressures,” Mendes added. “As a result, central bankers can take comfort that a stagflationary environment is not emerging.”<\/p>\n CPI-median and CPI-trim, long considered the Bank of Canada’s (BoC’s) preferred measures of core inflation, each slowed from the previous month. The BoC recently indicated<\/a> it may turn to a wider “dashboard” of indicators to measure underlying inflation.<\/p>\n In a note responding to Monday’s data, CIBC economist Andrew Grantham pointed out that two other measures, CPI-X (which strips out the eight most volatile components) and CPI excluding food and energy, also slowed from November.<\/p>\n “Overall though, core inflation is still too high to allow further interest rate cuts, albeit not strong enough to justify recent market pricing for hikes before the end of 2026,” Grantham wrote. “We continue to forecast the Bank of Canada to hold its overnight rate steady at its current level throughout next year.”<\/p>\n \u201cThis month\u2019s data is unlikely to sway the Bank of Canada\u2019s current perception that underlying inflationary pressures are around 2.5 per cent,\u201d CIBC economist Andrew Grantham wrote in a note Friday ahead of the release. \u201cWhile that\u2019s too strong to warrant talk of more cuts, it\u2019s also not worrying enough to justify recent market pricing for hikes in 2026.\u201d<\/p>\n