Canada Inflation


Canada: Inflation jumps in October

November 21, 2014

In October, consumer prices rose a seasonally-adjusted 0.1% over the previous month, which was below the 0.2% increase recorded in September. According to Statistics Canada, higher prices were recorded in seven of the eight major components of the index. The only price decrease was recorded in the index for health and personal care.

Annual headline inflation in September accelerated, rising from 2.0% in September to 2.4% in October. The figure marked the highest inflation rate since June and surpassed market expectations of a 2.1% rise. 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 September’s 1.7% to 1.8% in October, which represented a 24-month high. Annual core inflation, which excludes volatile items such as gasoline and fresh food, also rose to 2.3% from September’s 2.1% figure.

According to its October Monetary Policy Report, the Bank of Canada expects headline inflation to average 2.0% in 2014 and 1.6% 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 also average 2.0% in 2015, which is down 0.1 percentage points from last month’s forecast.

Author: Angela Bouzanis, Senior Economist

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Canada Inflation Chart

Canada Inflation October 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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