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Canada’s annual inflation rate holds steady at 6.9% on gas prices By Reuters



© Reuters. FILE PHOTO: The fruits and vegetables section is seen at a supermarket in Ottawa , Canada July 13, 2022. REUTERS/Patrick Doyle/File Photo

OTTAWA (Reuters) -Canada’s annual inflation rate held steady at 6.9% in October, matching analyst forecasts, as higher gasoline prices and mortgage interest costs offset a slight easing of food prices, Statistics Canada data showed on Wednesday.

The consumer price index rose 0.7% month-over-month, again matching analyst forecasts. Excluding food and energy, prices rose 5.3% year-over-year in October compared with a gain of 5.4% in September.

Gasoline prices rose more in October than in September, after the OPEC+ countries announced future oil production cuts and on a weaker Canadian dollar, Statistics Canada said. While food prices eased slightly off a four-decade high.

The Bank of Canada has lifted its benchmark rate by 350 basis points since March to 3.75%, one of its fastest tightening cycles ever. Money markets are betting on a 25-bp increase in December, with a roughly 35% chance of a larger hike.

The higher interest rate environment has pushed up lending rates in the Mortgage Interest Cost Index, Statistics Canada said. In October, annual mortgage interest costs increased by 11.4%, the largest jump since February 1991.

The central bank’s core measures of inflation, CPI-median and CPI-trim, both edged up with the average of the two at 5.1% compared with 5.0% in September. CPI-common has become less reliable due to large revisions, the bank said last month.

The Canadian dollar was trading 0.2% higher at 1.3253 to the greenback, or 75.45 U.S. cents.



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