Tame core gave BoC room to wait
Economists stressed that the softness in underlying inflation, rather than the headline print alone, matters most for Wednesday’s rate call.
Core measures CPI‑median and CPI‑trim both slipped to 2.3%, while CPI excluding food and energy edged down to 2.0%.
“The tame report will be welcomed by policymakers ahead of the energy price shock, as it shows that labour market slack is keeping a lid on core prices, with the issue for the BoC being how long the oil price shock lasts for and its magnitude,“ CIBC economist Katherine Judge wrote.
Claire Fan, senior economist at RBC, said, "At this week’s meeting, we expect the BoC to recognize growing external uncertainty but continue to hold the overnight rate at its current, borderline accommodative level of 2.25%."
BMO chief economist Douglas Porter wrote that “the Bank should be considering cutting rates, not raising them, in this economic backdrop.“