Lower Gas Prices Help to Ease Canadian Inflation 

The annual inflation rate in Canada eased more than expected in October, with core pricing measures edging down to their lowest levels in about two years. At 3.1 percent, the annual rate was lower than September’s 3.8 percent and below analysts’ expectations of 3.2 percent. For the month, the consumer price index matched forecasts at 0.1 percent.  

A steep drop in gasoline prices pulled down the annual inflation rate in October, and grocery prices also cooled down to their slowest pace since November 2021. Excluding the volatile food and energy categories, prices rose 3.4 percent compared with a 3.2 percent rise in September. While goods inflation slowed to 1.6 percent in October, services prices accelerated to the fastest pace since May.

The Bank of Canada (BoC) targets a 2 percent annual inflation and makes its next rate decision on Dec. 6. In addition to upcoming third-quarter GDP data, which is expected to show the economy slipped into a shallow recession, analysts are starting to predict rate cuts in 2024.  

 

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