26 January 2018

The telephone services fell in price by 7.6%, marking the largest monthly drop ever.

The reason could be a short but severe prices war, seen in December between major telecom companies. Shaw cut the prices for its certain plans, and Bell, Rogers and Telus followed the example. It caused long lines from customers who hurried to sign up for a good deal.

As a result, the overall amount Canadians spent on this category went down by 5% from a year ago.

Nevertheless, TD Bank senior economist Brian DePratto says that two of the central bank’s main measures of core inflation, which ignore the volatile gasoline, were slightly up in December.

“The Bank of Canada will probably feel good about both a relatively stable growth-inflation nexus, and its previous decision to raise the key lending rate to 1.25%. Of course, the existing uncertainty may lead to stronger caution, but achieving the necessary inflation level will require more tightening,” – DePratto noted.