Canada Inflation Research Brief

Inflation edges higher but remains contained. Canada’s annual inflation rate rose 50 basis points to 2.4 per cent in September, reflecting a modest upside surprise driven by specific categories rather than broad-based pressures. Higher food prices and a rebound in travel costs offset declines in clothing and household goods, while gasoline contributed modestly due to unfavourable base effects. The Bank of Canada’s core measures, CPI-trim and CPI-median, held steady at 3.1 per cent year over year, with the three-month annualized rate edging up 10 basis points to 2.7 per cent, indicating inflation is lingering and still above the 2.0 per cent target. While the data surprised to the upside, it suggests price pressures remain contained but not resolved.