Canadian Inflation Cools to 2.2% in October, Raising Hopes for Further Rate Cuts
OTTAWA – Canadian inflation slowed to 2.2% in October, according to Statistics Canada data released today, marking a further deceleration from September’s 2.8% adn possibly paving the way for additional interest rate cuts by the Bank of Canada. The figure represents the lowest inflation rate since April 2023.
The slowdown was driven in part by falling grocery prices, which decreased 0.6% in October – the largest monthly decline since September 2020. Grocery store prices rose 3.4% year-over-year, down from 4% in september. This decline was primarily attributed to lower costs for prepared and fresh vegetables, though increases in fresh and frozen chicken prices partially offset this trend.
Despite the overall easing of inflation,certain sectors experienced price increases. The cost of cell phone service rose 7.7% year-over-year, the first annual increase since april 2023. Consumers also faced higher costs for home, mortgage, and auto insurance, especially in Alberta. Nationally, home and mortgage insurance costs have increased 38.9% over the past five years, while auto insurance premiums have risen 18.9%.
The October inflation report is the final data point the Bank of Canada will consider before its final interest rate decision of the year on December 10. The central bank has already implemented back-to-back rate cuts in September and October, bringing its key rate to 2.25%.
bank of Canada officials have indicated they may pause further rate reductions unless economic data presents unexpected developments.
