Core Inflation Inches Up

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The Conference Board of Canada’s Principal Economist Alicia Macdonald offers the following insights on today's Consumer Price Index data:

Overall inflation held steady at 1.9 per cent in September. All three of the Bank of Canada’s measures of core inflation inched up last month and now average 2.1 per cent. With core price growth holding firm, the Bank of Canada is not expected to cut interest rates this year.


  • The Consumer Price Index increased 1.9 per cent from a year earlier in September, matching the pace of growth in August.
  • Excluding the effect of gasoline prices, inflation held steady at 2.4 per cent.
  • Growth in all three measures of core inflation used by the Bank of Canada increased by 0.1 percentage points last month. The average of the three measures now sits at 2.1 per cent with the Bank’s preferred measure, CPI-common, growing at a 1.9 per cent pace.
  • Strong price increases in mortgage interest costs (+7.5 per cent) and passenger vehicle insurance premiums (+8.9 per cent) exerted upward pressure on inflation.
  • There were notable declines in some prices last month with the cost of internet services down 7.9 per cent and tuition fees 3.6 per cent lower than last year. This marked the first decline in the tuition fees segment since it was introduced in 1973.
  • Overall, this morning’s inflation report reinforces our view that the Bank of Canada will not cut interest rates this year.

Alicia Macdonald

Principal Economist

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