BRITISH COLUMBIA – Canadian prices, as measured by the Consumer Price Index (CPI), rose 2.0 per cent on a year-over-year basis in October, up from a 1.6 per cent increase in September.
Month-over-month, on a seasonally adjusted basis, CPI increased by 0.3 points in October. Excluding gasoline, the CPI rose 2.2 per cent in October, matching the levels of August and September. Shelter price growth continues to cool, as mortgage interest costs were up 14.7 per cent, and rent was up 7.3 per cent from last October, both decreasing from September’s numbers of 16.7 and 8.2 per cent, respectively. Overall, shelter costs rose 4.8 per cent year-over-year in October, down from 5.0 per cent in September.
Finally, goods costs rose 0.1 per cent, while services costs rose 3.6 per cent year-over-year. In BC, consumer prices rose 2.4 per cent year-over-year, up from 2.0 per cent in September. The Bank of Canada‘s preferred measures of median and trimmed inflation, which strip out volatile components, increased to 2.5 and 2.6 per cent year-over-year, respectively.
Canada’s CPI report for October marks a return towards the midpoint of the Bank of Canada’s inflation target range. With CPI ex-gasoline remaining steady, headline growth is likely a function of increased consumer spending across various industries. This is demonstrated through monthly growth in each of the special aggregate CPIs published by Statistics Canada for October.
However, current inflation remains slightly below the Bank of Canada’s projection.
Looking ahead to December’s policy meeting, the Bank of Canada faces a delicate balancing act. Given the uncertainty surrounding economic conditions for 2025, particularly around growth prospects, the chance of a second consecutive “jumbo cut” remains on the table. A lot will depend on the upcoming GDP data, with the Bank hoping for signs of stronger economic activity in alignment with their current forcast.
