Inflation in Canada accelerates, as gas price relief slows and food prices climb

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 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.

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.

Economists polled by Reuters expected the annual inflation rate rose to 1.9 per cent last month, according to LSEG Data & Analytics.

More to come.

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.

Download the Yahoo Finance app, available for Apple and Android.