FXStreet (Mumbai) - Canada’s December CPI contracted more than expected, dropping 0.5 per cent month on month. It had declined 0.1 per cent in November. Year on year, CPI rose 1.6 per cent in December, lower than the expected 1.7 per cent increase but higher than 1.4 per cent year on year growth seen in November. Core CPI dropped 0.5 per cent month on month in December. BoC Core CPI contracted 0.4 per cent month on month in December. Year on year, it increased 1.9 per cent lower than the expected 2 per cent rise and also below 2 per cent rate achieved in November. Prices were up in all eight major components on a year-over-year basis in December, with the food and shelter indexes contributing the most to the rise in the CPI. The transportation index, which includes gasoline, registered its first year-over-year increase since October 2014. The transportation index was up 0.6% on a year-over-year basis in December, after recording 13 consecutive year-over-year declines. Consumers paid 3.7% more for food in December compared with the same month a year earlier. Prices for food purchased from stores were up 4.1% year over year in December, following a 3.7% increase the previous month. The acceleration was mainly attributable to the fresh vegetables and fresh fruit indexes, which rose more on a year-over-year basis in December than in the previous month. The clothing and footwear index however showed a small increase of 0.7% year over year in December, after rising 2.1% in November. For more information, read our latest forex news.