Canada Inflation Research Brief

Inflation continues to hold at target. Canada’s consumer price index rose 2.0 per cent year over year in October – up from a 1.6 per cent increase in September and above the consensus estimate of a 1.9 per cent gain. This uptick was partially driven by gasoline prices, which fell less in October compared with September. At the same time, property taxes – also included in the inflation calculation every October – jumped 6.0 per cent year over year. When excluding gas, however, inflation remained unchanged at 2.2 per cent. Annual price growth has sat within the Bank of Canada’s target range for all of 2024. Now, for the first time this year, both of the Central Bank’s preferred measures of core inflation have accelerated. CPI-median and CPI-trim each jumped 20 basis points to 2.5 per cent and 2.6 per cent, respectively. With price pressures slightly more broad-based, markets have trimmed their bets for an additional outsized rate cut in December, as a 25-basis-point move is becoming more likely.