Canada's inflation rate climbed back above the Bank of Canada's target band in September. Statistics Canada said Monday that the consumer price index rose 3.1% year over year, up from 3.0% in August and just below the 3.2% analysts polled by Reuters had forecast.
Energy did most of the damage. Energy prices rose 19% annually, following a 15.4% increase in August, and gasoline costs were up 27.8% from a year earlier. On a monthly basis, the CPI rose 0.1% in September after a 0.1% deceleration in August. Shelter prices rose 1.8% annually and rents 2.8%, while air transportation jumped 19.4%.
There were calmer signals underneath the headline. Grocery prices rose 1.7% year over year — the smallest yearly increase since May 2024 — and the Bank of Canada's core measures cooled, with CPI-median slowing to 1.9% and CPI-trim to 1.8% in September.
The September print is the last inflation reading before the Bank of Canada's monetary policy decision later this month. Governor Tiff Macklem has said the forecasts released with that decision will show higher inflation. Money markets are betting the bank holds its rate at 2.25% on October 28, while pricing in a 25-basis-point hike in December.
