Canada’s inflation rate remained at the bottom of the central bank’s target range in October, as lower gasoline prices were met with rising food and shelter costs.
The consumer price index rose 1 percent in October from a year ago, matching the September pace, Statistics Canada said Friday from Ottawa. The core rate, which excludes eight volatile products, also increased at the same pace as September with a
2.1 percent advance. Economists surveyed by Bloomberg forecast the total rate would rise 1 percent and core by 2 percent.
Consumer prices have lagged the Bank of Canada’s 2 percent target all year, a reflection of slack that Governor Stephen Poloz says will take until around mid-2017 to use up. The central bank cut its key rate to 0.5 percent in July to ward off damage from an oil shock that cut business investment.
At the same time, core inflation has remained above 2 percent since August 2014 as a weaker Canadian dollar that makes imports more expensive.
The Bank of Canada said the underlying trend of inflation is between 1.5 percent and 1.7 percent, according to its October Monetary Policy Report. The central bank sets interest rates to keep inflation in the middle of a 1 percent to 3 percent band.
Gasoline prices fell 17.1 percent in October from the same month a year earlier. Food prices advanced 4.1 percent in October, faster than September’s 3.5 percent gain.