[OTTAWA, ON] – Canada's inflation rate moved a notch higher last month as the prices of most things consumers buy increased.
Statistics Canada says the consumer price index rose to 3.2 per cent, while the underlying core inflation increased to the highest level in almost three years.
On a month-to-month basis, consumer prices were also on the march, rising two-tenths of a point in real terms from August to September, and three-tenths on a seasonally adjusted basis.
While the increases were moderate, the three-tenths of a point leap in the Bank of Canada's annual core inflation measure – and half-point jump in the monthly core reading – will raise some eyebrows at the central bank as it prepares for next week's interest rate announcement.
The gain took the core, which excludes volatile items such as gasoline and is regarded as a more accurate reflection of underlying inflationary pressures, took the index to 2.2 per cent, the first time it's been above the Bank of Canada's two per cent target since February 2010.
Still, few will be expecting bank governor Mark Carney to use the one-month development as a rationale for taking interest rates higher next week.
The central bank has left its policy rate at one per cent for more than a year and Carney has made it clear he considers the weakness of the economy as the number one priority. Economists say it's more likely Carney will cut rates than raise them in the near term.
Statistics Canada says the major drivers of inflation in Canada remain gasoline and food. They were up 22.7 per cent and 4.3 per cent respectively from a year ago, about the same levels as in August.
But the agency notes that most things have risen in the past year. In fact, all eight major components the agency tracks were higher last month on an annual basis: food; shelter; household operations and furnishings; clothing and footwear; transportation, which includes gasoline; health and personal care; recreation, education and reading; and alcohol beverages and tobacco products.
On a monthly basis, Canadians paid 10.5 per cent more on women's clothing as retailers introduced new winter and fall collections. Tuition fees and supplies, automobile purchases, airfare, household operations and financial services also cost more.
But there were also some savings in the monthly readings as fresh vegetables, fruit and cereals, electricity, mortgage insurance and gasoline edged down.
On a regional basis, Nova Scotia and New Brunswick had the country's highest annual inflation rate at 4.2 per cent, while British Columbia's 2.4 per cent was the lowest.