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Special Report

Canada Inflation Research Brief

November 2022

Sticky Inflation Persists, Yet Magnitude of
Interest Rate Hikes Likely to Soften

Price growth unchanged in October. Annual inflation remained at 6.9 per cent in October, down from the peak of 8.1 per cent in June. The Bank of Canada’s core CPI indicators have also held firm, with CPI-common unchanged compared to September, and CPI-trim and CPI-median only up 10 basis points each. Nonetheless, it appears the three-month annualized measures of core inflation — which policymakers are now focusing on — have declined. These October figures suggest that elevated interest rates are cooling demand and causing price growth to soften. Stabilizing core measures also reinforce how easing supply chain bottlenecks are helping to lower shipping rates and commodity prices, which should continue to temper inflation over the coming months.

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