Canada's inflation rises to 3.4% in Dec, meeting expectations

TORONTO (Reuters) - Canada's annual inflation rate rose to 3.4% in December from 3.1% in November, data showed on Tuesday, largely driven by higher gasoline prices. The inflation matched estimates by economists polled by Reuters.

One of the Bank of Canada's core measures of underlying inflation, CPI-trim, edged slightly higher to 3.7%, while CPI-median stayed at 3.6%.

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COMMENTARY

ANDREW KELVIN, CHIEF CANADA STRATEGIST AT TD SECURITIES

"With the acceleration in core inflation... I really think it speaks to the fact that the Bank of Canada still has some progress that they need to see in order to consider lowering interest rates."

"What this report does is it provides a sort of handy reminder that the BoC probably needs to be a little bit cautious before considering loosening monetary policy just given that there are still some underlying inflationary impulses in the economy."

(Reporting by Nivedita Balu; Editing by Denny Thomas)