Various vegetables are on display at the Jean Talon Market in Montreal. File photo by THE CANADIAN PRESS

Various vegetables are on display at the Jean Talon Market in Montreal. File photo by THE CANADIAN PRESS

StatCan reports annual pace of inflation held steady at 1.9 per cent in October

OTTAWA — The annual pace of inflation held steady for the third month in a row in October as the consumer price index rose 1.9 per cent compared with a year ago, Statistics Canada said Wednesday.

The result was also in line with the expectations of economists, according to financial markets data firm Refinitiv, and just shy of the Bank of Canada’s target of two per cent.

Royce Mendes, senior economist for CIBC Capital Markets, said inflation has been remarkably stable for a number of months.

“If there’s one thing that isn’t keeping governor (Stephen) Poloz up at night, it’s inflation, which again came in on both the headline and core measures almost bang on the Bank of Canada’s two per cent target,” Mendes wrote in a report.

He said the Bank of Canada’s success in hitting its inflation target is one reason why the central bank hasn’t been as eager cut its key interest rate like other central banks around the world have done.

“But, if growth numbers continue to disappoint, there could still be a Canadian rate cut coming in the new year,” Mendes said.

The overall rise in prices came as food prices rose 3.7 per cent compared with a year ago. Fresh fruit prices rose 7.9 per cent and fresh vegetable prices climbed 7.5 per cent.

However, compared with a year ago, the price of gasoline was down 6.7 per cent in October compared with a 10.0 per cent decline in September.

Statistics Canada said although global demand for oil remained low in October, there were slight price increases on a monthly basis due to temporary supply disruptions in the Middle East and a drop in crude oil inventories in the United States.

Excluding gasoline, the annual pace of inflation was 2.3 per cent in October, down from 2.4 per cent in September.

Regionally, prices were up 2.3 per cent compared with a year ago in Quebec, while Manitoba and B.C. both saw increases of 2.2 per cent. The annual pace of inflation was 1.7 per cent in Ontario.

The average of Canada’s three measures for core inflation, which are considered better gauges of underlying price pressures, was 2.07 per cent compared with a revised figure of 2.03 per cent in September.

The core readings are closely monitored by the Bank of Canada, which adjusts its key interest rate target to manage inflation.

Josh Nye, a senior economist at Royal Bank, said given strong wage growth in recent months, he’ll be watching to see if the core measures rise further in 2020.

“But with inflation expectations looking well anchored, the scope for stronger underlying inflation looks fairly limited,” Nye said.

The Bank of Canada kept its key interest rate on hold at 1.75 per cent last month. The central bank said at the time that inflation was on target and the domestic economy has held up, but it was keeping a watchful on global growth.

In making its decision, the bank said lowering rates could provide some insurance against the downside risks for the economy, but that it wasn’t worth the cost at the time.

Nye said he expects monetary policy will be dependent on the growth outlook and trade risks.

“We think below-trend growth over the second half of this year will leave the door open to a rate cut in early-2020,” he said.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Dwayne Buckle, 40 of Red Deer finished a 1,638-kilometre walk, in honour of his family. The 12-week, 82 day-journey wrapped up in Port Hardy, B.C. on Monday. Facebook photo
Red Deer man completes 1,638 km hike for cancer research

Dwayne Buckle, a Red Deer firefighter returned home Friday after his 12-week journey

The Pfizer-BioNTech vaccine deliveres to Canada are being delayed because of complications at their European distribution facility. THE CANADIAN PRESS/Nathan Denette
Delays of Pfizer vaccine delivery to impact Alberta’s vaccination plans

Alberta has administered 74,000 doses of the COVID-19 vaccine so far

Two inmates at Bowden Institution have tested positive for COVID-19. (Black Press File Photo)
2 Bowden inmates test positive for COVID-19

A pair of inmates at Bowden Institution have tested positive for COVID-19.… Continue reading

Salons and barbershops are able to open on Monday, the Government of Alberta announced this week. (Photo courtesy Pixabay)
Red Deer salon owner “relieved” business can re-open next week

The owner of a Red Deer salon says she’s “definitely relieved” her… Continue reading

Red Deer Valhalla Pure Outfitters owner Darren Schaedeli has seen a significant increase in those looking to tackle winter experiences. Some are trying their hand at "hot tent camping" as he did in the West Country several weeks ago.
Photo contributed
Central Albertans enjoying the great outdoors this winter

Stir crazy and beach-deprived central Albertans are embracing the great outdoors this… Continue reading

Lesser Slave Lake UCP MLA Pat Rehn. (Facebook)
Updated: Jason Kenney kicks Lesser Slave Lake MLA out of caucus

Pat Rehn will not be permitted to run for UCP nominations

One way to get infloor heating is with electrical cables installed underneath ceramic tiles. Here DITRA-HEAT cables are snapped into an uncoupling underlay that goes down before tiles. (Photo by Robert Maxwell)
Houseworks: Heating a basement under renovation

Q: Will DITRA-HEAT electric infloor heating be enough to make my finished… Continue reading

Super Valu has experienced an increase in demand for products such as toilet paper as people prepare for the coronavirus. (Photo by SUSAN ZIELINSKI/Advocate staff)
Hints from Heloise: Stock your closet

Dear Heloise: If this year has taught me anything, toilet paper, wipes,… Continue reading

Manchester United's Tobin Heath celebrates scoring against West Ham United during the FA Women's Super League match at Victoria Road Stadium, London, Sunday Oct. 18, 2020. (John Walton/PA via AP)
Double 1st: Man U men, women leading 2 leagues, play champs

Double 1st: Man U men, women leading 2 leagues, play champs

A group of Buffalo Bills fans from Toronto pose for a photo while tailgating in the parking lot of New Era Field before an NFL football game between the Bills and the New York Jets, Sunday, Dec. 9, 2018, in Orchard Park, N.Y. THE CANADIAN PRESS/AP-Adrian Kraus
Being unable to attend Bills playoff games due to pandemic pains Canadian fans

Being unable to attend Bills playoff games due to pandemic pains Canadian fans

FILE - Chicago Cubs' Kris Bryant runs the bases after hitting a solo home run in the sixth inning during a baseball game against the Cleveland Indians in Cleveland, in this Wednesday, Aug. 12, 2020, file photo. Bryant is among roughly 125 players who entered Friday, Jan. 15, 2021, eligible to exchange salary arbitration figures with their teams. (AP Photo/Tony Dejak, File)
Lindor, Bryant, Bellinger, Seager get big-money deals

Lindor, Bryant, Bellinger, Seager get big-money deals

Brooklyn Nets coach Steve Nash points during the third quarter of the team's NBA basketball game against the New York Knicks on Wednesday, Jan. 13, 2021, in New York. (Brad Penner/Pool Photo via AP)
More NBA games off, as league continues struggles with virus

More NBA games off, as league continues struggles with virus

Washington Capitals' Jakub Vrana (13) is congratulated for his goal during the second period of the team's NHL hockey game against the Buffalo Sabres, Friday, Jan. 15, 2021, in Buffalo, N.Y. (AP Photo/Jeffrey T. Barnes)
Vanecek makes 28 saves in NHL debut, Capitals sweep Sabres

Vanecek makes 28 saves in NHL debut, Capitals sweep Sabres

Chicago Blackhawks goaltender Collin Delia (60) makes a save after Tampa Bay Lightning left wing Ondrej Palat (18) fell down during the first period of an NHL hockey game Friday, Jan. 15, 2021, in Tampa, Fla. (AP Photo/Chris O'Meara)
Stamkos, Palat lift Lightning over Blackhawks again

Stamkos, Palat lift Lightning over Blackhawks again

Most Read