Canada's annual inflation rate falls in January

Lower prices for gasoline and natural gas prompted Canada's annual rate of inflation to dip to 1. 2 percent in January.

Despite rising housing costs, the rate went down from 1.6 percent in December, Statistics Canada reported Tuesday.

The core consumer price index rose by 2.1 percent between January 2006 and January 2007, following a two percent increase in December. The core inflation rate omits some volatile factors such as mortgage costs, some foods, gasoline and fuel oil, and indirect taxes.

The rise in mortgage interest costs continued their upward climb that begun in 2006, reaching an annual rate of 5.1 percent in January 2007. This was a slight increase from the 4.9 percent growth posted in December.

Homeowners' replacement costs slowed. Prices rose only 7.6 percent between January 2006 and January 2007 after two consecutive months of 8.2 percent annual growth. The 12-month increase had reached a high of 8.8 percent in September and October 2006 before starting to ease.

Source: Xinhua