OTTAWA – Canada’s latest reading on inflation came in hotter than expected as the cost of groceries continued to climb at the fastest pace in decades, setting the stage for another sizeable interest rate hike next week.
In its latest consumer price index report, Statistics Canada said the country’s annual inflation rate in September dropped slightly to 6.9 per cent from 7.0 per cent in August.
BMO’s chief economist Douglas Porter said the deceleration in headline inflation was smaller than what was expected. Bluntly, inflation did not ease as much as anticipated last month, even as gasoline costs took a big step back,” he said.
With underlying inflation pressures still sticky and the Bank of Canada signaling it isn’t backing away from rate hikes yet, BMO is forecasting the central bank will raise its key interest rate by three-quarters of a percentage point next Wednesday.
Statistics Canada attributed the slower pace of price growth to lower gas prices. Prices at the pump fell by 7.4per cent in September from August. As gas prices fell, though, grocery prices rose at the fastest rate since August 1981, with prices up 11.4 per cent compared with a year ago. That’s up from the previous month’s annual rate of 10.8 per cent and the 10th straight month that food prices have outstripped the overall inflation rate. The slight decline in the headline inflation rate is similar to what the U.S. experienced in September, with their headline inflation rate falling from 8.3 to 8.2 per cent. Source: ica. finance
Tuesday, May 5, 2026
