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OTTAWA — Canada’s annual inflation rate accelerated to two per cent last month as higher costs for airfares and fresh vegetables offset cheaper prices at the pump, Statistics Canada said Friday.

Year-over-year prices picked up their pace in December after inflation was just 1.7 per cent in November, the agency said in its latest consumer price index.

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Economists had expected a year-over-year increase of 1.7 per cent for December, according to Thomson Reuters Eikon.

Compared with a year earlier, the report said Canadians paid 28.1 per cent more last month for air transportation — mostly due to higher travel prices during the holidays — and 14.9 per cent more for fresh vegetables.

Lower gas prices, down 8.6 per cent last month, kept inflation from being even higher. Excluding the lower price of gasoline, inflation was 2.5 per cent in December.

Inflation was also up last month due to a 7.5 per cent boost in mortgage interest costs, a 3.8 per cent increase in restaurant bills and 5.1 per cent rise in passenger vehicle insurance premiums.