Majority of economists expect rate cut in JuneJuly
Canada39;s Dec inflation rose to 3.4 from 3.1 in Nov
Current interest rate at a 22year high of 5

OTTAWA, Jan 22 Reuters The Bank of Canada is expected to leave its key overnight rate unchanged at its meeting on Wednesday, but stubborn inflation has markets delaying the timeline for the first rate cut in almost four years.

After the previous three months showed prices declining or flat versus a year ago, headline inflation picked up in December, accelerating to 3.4 from 3.1 and the closelywatched core inflation data also surprised on the upside.

That prompted money markets to push back their bets. Money markets are now unanimous on a 25basispoint cut by June, while expectations of a similarsized cut in April has now dropped to 70 from 100 before the December inflation data.

Before the most recent inflation print, I think pretty much every ingredient was in line to get a rate cut, said Jules Boudreau, senior economist with Mackenzie Investments.

But the recent jump in inflation throws out of the window any chance of getting a rate cut this week and it is very unlikely even in March, he said.

Boudreau sees the first, quarterpoint cut in April, later than he had previously forecast.

Economists have said that inflation in Canada is going to remain stickier than the U.S. and the BoC will trail the Federal Reserve when it comes to the first rate cut this year.

All 34 economists in a Reuters poll expect the Bank of…