Canada’s annual inflation rate rose two per cent in October, due in part to the base-year effect on gasoline prices, according to data released by Statistics Canada on Tuesday. In September the Consumer Price Index (CPI) increased at a 1.6 per cent annual pace.
The Bank of Canada’s (BoC) closely-watched measures of core inflation also accelerated slightly in October. CPI-median rose from 2.1 in September to 2.2 per cent, while CPI-trim climbed from 2.4 to 2.6 per cent.
“Given that this report follows a string of better news on inflation, and the fact that the GDP and employment data remain to be seen ahead of the December BoC decision, we still see a 50bp cut as possible at the next BoC meeting,” Katherine Judge of CIBC Econonics wrote following Tuesday’s announcement.
Canada’s central bank is scheduled to issues its latest rate decision on Dec. 11. Last month, Bank of Canada Governor Tiff Macklem said “Canadians can breath a sigh of relief” and “don’t have to worry about big changes in their cost of living.”
Economists polled by Reuters expected the annual inflation rate rose to 1.9 per cent last month, according to LSEG Data & Analytics.
On a monthly basis CPI rose 0.4 per cent in October. Seasonally adjusted, CPI increased 0.3 per cent.
Gasoline prices fell less in October (-4.0 per cent) than they had in September (-10.7 per cent). “The smaller decline is partly attributed to a base-year effect, as prices fell 6.4 per cent month over month in October 2023, stemming from lower refining margins and weaker global oil consumption,” the federal agency stated on Tuesday.
Prices for food purchased from stores rose at a faster pace year-over-year in October, up 2.7 per cent compared with September, at 2.4 per cent.
“This was the third consecutive month price growth for groceries outpaced headline inflation,” StatCan said.
Rental costs rose more slowly on an annualized basis, adding 7.3 per cent in October, versus 8.2 the prior month. Nova Scotia and Manitoba saw rents increase the least.
“Although slowing, prices for rent continue to increase and remain elevated,” StatCan said. “Compared with October 2021, prices for rent increased 21.6 per cent.”
The agency notes interest paid on mortgages has decelerated year-over-year since September 2023, following a peak in August.
The overall shelter category, which includes a range of items spanning from rent to home repair, saw price growth ease to 4.8 per cent year-over-year in October, compared to five per cent in September.
