Inflation inches higher to 3.2%
Canada's inflation rate rose to 3.2 per cent in the 12 months ended in September, pushed higher by price hikes for gasoline and food.
Statistics Canada reported Friday that prices for food rose 4.3 per cent in the past year, while energy prices advanced 12.5 per cent. Those factors were the major contributors to the overall inflation increase.
Economists polled by Thomson Reuters had been expecting the rate to come in around 3.1 per cent.
A month ago, the inflation rate stood at 3.1 per cent. If food and energy are factored out, the inflation rate increased 1.9 per cent in the 12 months to September, following a 1.5 per cent advance the month before.
The agency noted that all eight major components the agency tracks were higher last month on an annual basis:
- Household operations and furnishings.
- Clothing and footwear.
- Transportation, which includes gasoline.
- Health and personal care.
- Recreation, education and reading.
- Alcohol beverages and tobacco products.
In general, the price of almost everything was increasing. But there were also some savings in the monthly readings as fresh vegetables, fruit and cereals, electricity, mortgage insurance and gasoline edged down.
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On a regional basis, Nova Scotia and New Brunswick had the country's highest annual inflation rate at 4.2 per cent, while British Columbia at 2.4 per cent was the lowest.
Nationally, the Bank of Canada's core index (which is the one the central bank pays closer attention to in making interest rate decisions) advanced 2.2 per cent in the 12 months to September.
That's the largest year-over-year gain in the core index since December 2008. The bank's target is a core rate under two per cent. At 2.2 per cent, it's the first time the rate has been above that target since February 2010.
But that's not to say a rate hike seems likely soon. "When [Bank of Canada] governor Mark Carney reiterates that the bank has allowed achieving its inflation target to vary over time horizons stretching from two to 12 quarters, the implication is that the current inflation targeting mandate gives the bank plenty of latitude," Scotiabank economist Derek Holt said in a note shortly after the numbers were released.
Despite the higher rate, Holt maintains his expectation that the central bank will not raise or lower rates for the next year.
With files from The Canadian Press