OTTAWA: Canada’s annual inflation rate unexpectedly remained at 3.1% in November, as slower growth in food prices and cheaper cellular services and fuel oil were offset by an acceleration in prices of travel tours, data from Statistics Canada showed on Tuesday.

Analysts polled by Reuters had forecast inflation would ease to 2.9% from 3.1% in October. On a month-over-month basis, the consumer price index was up 0.1%, compared with a forecast for a 0.1% decline.

The data helped push the Canadian dollar up 0.3% to C$1.3351 to the greenback, or 74.90 U.S. cents, from C$1.3376, or 74.74 U.S. cents.

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Money markets trimmed their expectations for monetary policy easing, with the chances of a cut by the Bank of Canada next month dipping to 16.3% from 21.4%. Markets still expect the central bank to begin easing as soon as April.

Headline inflation is still broadly in line with the Bank of Canada’s projection for it to hover around 3.5% until mid-2024, before slowly cooling to the central bank’s 2% target by the end of 2025.

CPI-median and CPI-trim - two of the BoC’s three core measures of underlying inflation - also held steady at 3.4% and 3.5%, respectively.

The Bank of Canada could start cutting interest rates next year as long as core inflation comes down as predicted, BNN Television cited BoC Governor Tiff Macklem as saying in an interview that aired on Monday.

The central bank has left its key interest rate at a 22-year high of 5% in its last three policy meetings and has maintained that it is too soon to talk about rate cuts. The central bank’s next rate announcement is on Jan. 24.

Prices for food purchased from stores increased 4.7% in November, a slowdown from the 5.4% recorded in October, while energy prices fell 5.7% compared with a 5.4% decline in the prior month, Statscan said.

Excluding volatile food and energy, prices rose 3.5% compared with a 3.4% year-over-year rise in October.