RBC on what inflation results mean for the Bank of Canada

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“Broader ‘core’ measures of price growth still improved in November and some of the largest contributors to near-term price pressures, namely mortgage interest costs and rents, actually eased by more than expected,” RBC said in its analysis.

“If anything, the release today serves as a reminder that inflation readings can still be ‘sticky’, and why we continue to expect a cautious approach as the BoC starts to think about when to begin cutting interest rates.”

RBC is anticipating the first central bank rate cuts to come by mid-2024, “contingent on further (but widely expected) softening in CPI readings in the months ahead.”

Speaking to BNN Bloomberg, RSM Canada economist Tu Nguyen said that “monetary policy is the main driver of inflation at this point.”

“We expect four 25-basis point rate cuts in 2024, with further cuts in 2025 to reach 3%,” Nguyen said.

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