Canadian inflation hits 30-year high, boosting chance of early rate hike

• Canada's annual inflation rate accelerated in December to hit a 30-year high, data showed on Wednesday, bolstering expectations the central bank could hike interest rates as soon as next week. 
• Inflation rose to 4.8%, in line with analyst expectations and the highest print since it reached 5.5% in September 1991, Statistics Canada said. It was the ninth consecutive month in which headline inflation topped the Bank of Canada's 1% to 3% control range. 
• Core inflation measures all rose, with the closely watched CPI common measure near a 10-year high at 2.1%. That could fuel bets the central bank will start hiking interest rates next week, despite uncertainty around the impact of the Omicron coronavirus variant. 
• "We have core inflation getting to the upper end of the (Bank of Canada) target range and I think that's going to spook them," said Derek Holt, vice president of capital markets economics at Scotiabank. “The worst thing they can do during the pandemic is to show they are not serious about containing cost of living pressures." 
• The Bank of Canada's benchmark rate has been at a record low 0.25% since the pandemic took hold in March 2020. It previously signaled it could tighten as early as April, but money markets see a roughly 70% chance of a hike on Jan. 26.

 (Source: Reuters)