Canada's inflation rate increased to 2.4% in December 2025, slightly above November's 2.2%, primarily due to the impact of last year's GST/HST holiday which temporarily lowered prices. The holiday, which lasted from mid-December 2024 to mid-February 2025, artificially suppressed prices, leading to a comparative rise in inflation once it ended. Despite the headline increase, core inflation measures, which exclude volatile elements like energy and taxes, showed signs of easing, with the Bank of Canada (BoC) likely encouraged by the slowdown in these underlying indicators. Key core metrics, such as the CPI-median and CPI-trim, fell further in December, with annualized rates below the BoC's 2% target, suggesting subdued underlying inflation. Energy prices declined nearly 9% from the previous year, partly due to the removal of the consumer carbon tax, while food prices, especially meat and groceries, continued to rise, driven by global commodity trends and reduced cattle inventories. The report indicates that inflation remains uneven across sectors, with significant increases in food and restaurant prices, while energy costs have eased. Economists suggest that the BoC is unlikely to cut interest rates further given the stabilizing economic conditions and inflation trends, though concerns about rising food prices persist.