The pick-up in core inflation to 1.4% in January, from 1.3%, reflects both base-year effects and possibly some early impact from the weaker Canadian dollar. The latter is something that we anticipate will cause inflation to nudge higher in the coming months, although the excess capacity in the economy means it should remain relatively subdued. Overall, we doubt that January's inflation report will materially change the Bank of Canada's thinking on the interest rate outlook.
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