Canada’s inflation rate fell to 1.6 per cent in September after hitting the Bank of Canada’s 2 per cent target in August, Statistics Canada said Tuesday.
This was the smallest year-on-year increase in the consumer price index since February 2021, the data agency said.
Falling gasoline prices (down 10.7% on an annualized basis) pushed down inflation last month. The inflation rate for all items except gasoline was 2.2%, the same as in August.
The agency noted that even though inflation has slowed, prices, especially for rent and food, are still rising.
For the second month in a row, food prices rose faster than headline inflation. Prices for seafood and other seafood, nuts and seeds, and fish have fallen over the years, but prices for fresh and frozen beef and eggs have risen.
Rent price growth slowed in September, rising 8.2 per cent year-on-year compared with an 8.9 per cent rise in August, with growth slowing in Newfoundland and Labrador, New Brunswick and British Columbia.
Statistics Canada said the consumer price index rose 1.6 per cent in September compared to a year earlier, the “lowest annual increase since February 2021.”
Some analysts believe this statistic increases the likelihood of a 50 basis point rate cut at the Bank of Canada’s Oct. 23 meeting. The bank has cut interest rates three times so far this year.
“Canadian headline inflation slowed more than expected last month, lowering the bar for a significant interest rate cut at next week’s Bank of Canada meeting,” said Karl Sciamotta, chief market strategist at Kopay.
“While we are not yet convinced that Canada’s economy requires an emergency-scale response, there is little doubt that today’s indicators reduce the downside risks associated with more aggressive action,” Sciamotta said. said.
