Inflation holds steady at 1.1% in September
Economists say no pressure for Bank of Canada to raise interest rates
Canada's inflation rate remained quite low in September as prices rose 1.1 per cent from a year ago, matching the rate in August, according to Statistics Canada.
The agency said prices in seven of the eight major components of the index posted year-over-year increases. Shelter costs led the rise, up 1.4 per cent from last September, while prices for food and transportation also increased.
The health care component was the only major sub-index to decline, down 0.1 per cent from a year ago.
Consumer prices rose in nine provinces in the 12 months to September. Manitoba recorded the largest increase and British Columbia was the lone province to post no change on a year-over-year basis last month.
"Canadian inflation is (the) same as it ever was . . . low and stable," BMO chief economist Douglas Porter said in a note.
RBC Economics said the report suggests the Bank of Canada will hold steady on interest rates, a conclusion being echoed by TD Economics.
"We expect a very slow grind upwards in core inflation from here, as more modest economic growth, intense competition at the retail level, and very little upward pressure from wages are conspiring to keep Canadian inflation tame," TD economist Leslie Preston said in a note.
"We don't expect the Bank of Canada to see the necessity to raise interest rates for at least a year, and possibly longer."
Bank of Canada governor Stephen Poloz said last month that controlling inflation will continue to be the primary focus of the central bank's monetary policy. The bank has a target of two per cent for the core inflation rate, which strips out volatile items like food and transportation.
The core inflation rate was 1.3 per cent in September, also unchanged from August, putting it on the low end of the bank's target range.
with files from the Canadian Press