The Globe and Mail reports in its Wednesday edition that Canada's annual inflation rate fell in December due to the goods and services tax holiday, keeping the Bank of Canada on course to lower interest rates next week amid potential tariffs from the United States. The Globe's Matt Lundy writes that the Consumer Price Index increased 1.8 per cent in December year-over-year, meeting analyst expectations, according to Statistics Canada. This marks the fifth straight month inflation has been at or below the BOC's 2-per-cent target. Economists and investors expect a rate cut at the BOC's Jan. 29 meeting, with an 82-per-cent chance of a quarter-point decrease from the current 3.25 per cent. However, rate cuts are less certain this year as the bank has indicated a more gradual approach to monetary policy easing. BMO economist Doug Porter says: "We believe that the heavy overhang of trade uncertainty -- possible U.S. tariffs -- overrides almost all else. As a result, we suspect that today's reading is just good enough to allow the [BOC] to trim [rates] next week, for risk management purposes." Statscan said in Tuesday's report that about 10 per cent of the CPI basket was affected by the tax exemption, which runs until Feb. 15.