Most economists opine that the Bank of Canada will hike its interest rate to 3.5 percent next week. If this happens it will be the fourth straight time the central bank has done this. The bank has been aiming to bring down inflation with interest rate increases. Core inflation excluding gasoline and food increased 1.6 percent last December compared to a year ago.

The overall consumer price index rose 2.2 percent which was below expectations. Canada’s economy is expected to grow at a rate of 3 percent this year and next. The jobless rate in Canada for December was 6.5 percent which is the lowest in three decades. Wages for the same period were higher by 3.8 percent from a year ago. Bloomberg reports :

The overall consumer price index rose a less-than-expected 2.2 percent. “So far the inflation side has performed well, but we know there are lags between capacity pressures and inflation, so we have to worry about that,” said Don Drummond, chief economist at Toronto-Dominion Bank in Toronto.