OTTAWA, Oct 19 (Reuters) - Canada's annual inflation rate rose at 3.1% in September, data showed on Monday, as higher prices of gasoline and diesel pushed the consumer price index above the Bank of Canada's upper limit once again after three months.
Analysts polled by Reuters had forecast an inflation of 3.2% in September, up from 3% in August.
- The September inflation is the last CPI data before the BoC's monetary policy decision later this month.
- On a month on month basis, the CPI rose by 0.1% in September, from a deceleration of 0.1% in August, Statistics Canada said.
- The BoC Governor Tiff Macklem has said that the new forecasts that will be released alongside the rates decision will show higher inflation in Canada. However, there are still no signs that inflation has spread onto other commodities.
- The higher CPI was largely driven by a 19% rise in energy prices on an annual basis, following a 15.4% rise in August. This led to an increase in gasoline costs to 27.8% year on year.
- Grocery prices continued to rise at a slower pace in September, with food purchased at stores rising by 1.7% year over year. This was the smallest yearly increase since May 2024, StatsCan said.
- Shelter prices increased in September and rose by 1.8% annually following an increase of 1.5% in August. Rents increased by 2.8% in September.
- Air transportation rose by 19.4% although the year over year increase in travel tours increased slower than the previous month.
- CPI-median, the centermost component of the CPI basket, slowed to 1.9%, while CPI-trim, which excludes the most extreme price changes, was at 1.8% in September.
- Money markets are betting that the BoC will hold its rate at 2.25% on October 28, although they are pricing in a 25 basis point hike in December.
- The Canadian dollar firmed after the data and was trading up 0.29% to C$1.4096 to the US dollar, or 70.94 US cents. Yields on the two-year government bonds were up 7.7 basis points to 2.545%
Reporting by Promit Mukherjee, Editing by Louise Heavens
