Canada Inflation

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Canada: Inflation eases slightly in September

October 17, 2014

In September, consumer prices rose a seasonally-adjusted 0.2% over the previous month, which was above the 0.1% increase recorded in August. According to Statistics Canada, higher prices were recorded in five of the eight major components of the index. The largest price increase was recorded in the index for food, followed by clothing and footwear. Conversely, prices for transportation declined in September.

Annual headline inflation in September edged down to 2.0% from August’s 2.1%, which was in line with market expectations. Inflation is still well anchored within the Central Bank’s tolerance margin of plus/minus 1.0 percentage points around its target of 2.0%. Annual average inflation continued on an upward trend and inched up from August’s 1.6% to 1.7% in September, which represented a 23-month high. Annual core inflation, which excludes volatile items such as gasoline and fresh food, remained unchanged at August’s 2.1% in September.

According to its July Monetary Policy Report, the Bank of Canada expects headline inflation to average 1.6% in 2014 and 1.7% in 2015. FocusEconomics Consensus Forecast panelists expect inflation to average 2.0% in 2014, which is unchanged from the previous month’s forecast. The panel expects inflation to average 2.0% in 2015, which is also unchanged from last month’s forecast.


Author: Angela Bouzanis, Senior Economist

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Canada Inflation September 2014

Note: Year-on-year and month-on-month variation of seasonally adjusted consumer price index in %.
Source: Statistics Canada (SC).


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