Canada's inflation rate holds steady at 3.1%

Canada's annual inflation rate was unchanged last month, holding steady at 3.1 per cent as progress on tamping down price growth stalled.

The November consumer price index report released Tuesday from Statistics Canada shows higher prices for recreation and clothing put upward pressure on inflation.

Forecasters were widely expecting to see inflation tick down last month.

However, the report still had some encouraging elements, including a slowdown in some core inflation measures, which strip out volatile components.

"Today's moderately disappointing result drives home the point that we still have an inflation fight on our hands--in case there was really any doubt," wrote BMO chief economist Douglas Porter in a client note.

"Still, the bigger picture remains intact: The underlying inflation trend is lower, the economy is chilly, and the Bank is expected to begin trimming rates around mid-year."

The report also spelled some good news when it comes to groceries as the pace of price increases eased for a fifth consecutive month.

Grocery prices were up 4.7 per cent from a year ago, marking a slowdown from 5.4 per cent in October.

Prices for services were unchanged last month as higher prices for travel tours were offset by lower prices for cellphone services.