Canada’s inflation rate slowed to 2.9% in January as gas prices fell [Video]

Canada’s annual inflation rate slowed to 2.9 per cent in January, mostly due to a deceleration in the price of gas, Statistics Canada said Tuesday.

Economists were expecting the rate to come in at 3.3 per cent.

Gas prices fell four per cent year over year in January after driving headline inflation up to 3.4 per cent in December, due to what economists call a base-year effect (the impact of comparing prices in a given month to the same month a year earlier).

Excluding gasoline, the consumer price index came in at 3.2 per cent.

However, mortgage interest costs continued to be the No. 1 driver of inflation, at a year-over-year rate of 27.4 per cent, while rent price growth ticked up to 7.9 per cent.

“Housing is certainly the biggest part of most people’s budget and of inflation overall,” said Tu Nguyen, an economist with RSM Canada. “We have seen prices for both renters and homeowners go up …