Canada: Inflation eases in October
November 18, 2011
In October, consumer prices increased a seasonally adjusted 0.3% over the previous month, which was below the 0.4% increase in September. Higher gasoline prices continued to be the main driver behind the monthly price rise, as reflected by the 0.6% month-on-month increase in prices in the energy category. Annual headline inflation edged down from 3.2% in September to 2.9% in October, falling short of market expectations of inflation moderating to 2.7%, as energy inflation slowed from 12.5% year-on-year in September to 11.7% in October. Currently, inflation remains within the Central Bank's 1 percentage point tolerance margin around its 2.0% target. Annual core inflation, which excludes volatile items such as gasoline and fresh food, inched down from 2.2% in September to 2.1% in October. The Bank of Canada expects headline inflation to average 2.9% in 2011 and 1.4% in 2012.