Canada's Inflation Curve: October Trends Explain Stability

In October, Canada's inflation rate eased to 2.2% as gasoline prices dropped, food prices eased, and mortgage interest costs fell below 3%. The removal of a carbon levy on gasoline contributed to inflation deceleration. Analysts had forecasted a 2.1% inflation rate. The Bank of Canada plans to maintain its current policy rate.

Canada's inflation rate in October eased to 2.2%, supported by decreasing gasoline prices, a decline in food costs, and reduced mortgage interest rates falling below the 3% threshold, as new data revealed on Monday.

The removal of the carbon levy on gasoline significantly influenced this inflation dip, though the consumer price index rose 2.7% over the year, per Statistics Canada. Such figures were just shy of analysts' predictions, which had forecasted a 2.1% rise.

The Bank of Canada attributed stable inflation as the primary rationale to pause its rate cuts, with continued easing potentially reinforcing this stance. Meanwhile, the Canadian dollar slightly weakened, and government bond yields experienced a marginal dip.

(With inputs from agencies.)