Investing.com -- In December, Canadian consumer prices continued their gentle upward trend, according to recently released data.
This was largely due to a sales tax break that began in the middle of the month, which resulted in reduced prices for items such as alcohol, restaurant foods and children's clothing.
Statistics Canada said that the annual inflation rate fell to 1.8%, slightly lower than anticipated and a slight decrease from November's 1.9%. On a monthly basis, the consumer price index saw a contraction of 0.4%.
On an annual basis, prices for alcoholic beverages bought from stores saw a decrease of 1.3% in December, a significant change from the 1.9% increase observed in November.
Food purchased at restaurants also saw a decrease, with prices falling by 1.6% in December, compared to a 3.4% rise the previous month.
The Consumer Price Index includes all excise and other taxes paid by consumers. Therefore, any tax break directly reduces the prices recorded by the statistical agency.
The sales tax break, which affected a tenth of the components of the CPI basket, is set to continue until mid-February. Statistics Canada noted that January will see a full month of exemption, as opposed to the 18 days of exemption in December.
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