Price pressures in Canada unexpectedly slowed in December, as the nation entered a new wave of lockdowns.

Annual inflation decelerated to 0.7 per cent, from 1 per cent in November, Statistics Canada reported Wednesday in Ottawa. Economists had expected 1 per cent, according to the median estimate in a Bloomberg survey. Core inflation, a better measure of underlying pressure, dropped to 1.57 per cent, down 10 basis points from the prior month.

After climbing to the highest since the pandemic in November, the latest reading shows price pressures are still well below the Bank of Canada’s 2 per cent target. That’s consistent with the view from policy makers that inflation will remain subdued for some time as a second wave of virus cases forces tighter restrictions on businesses and households.

On a monthly basis, CPI fell 0.2 per cent compared with a forecast of a 0.1 per cent increase in a Bloomberg survey.