Consumer prices rose 3.4 percent from a year earlier, after a 3.5 percent pace in August that was the fastest since March 2003, Statistics Canada said today in Ottawa. Prices advanced 0.1 percent on a monthly basis in part because of a jump in clothing prices. Economists in a Bloomberg survey predicted a 3.3 percent annual pace and no month-over-month change.
The Bank of Canada, which has lowered interest rates by three-quarters of a percentage point this month, said yesterday that inflation in the country has probably peaked, predicting a lack of credit and a global recession will push prices down. Canada's inflation rate will slow to 1 percent in the second half of next year, below the bank's target.
Policy makers set rates to keep inflation between 1 percent and 3 percent, with an optimal target of 2 percent. Bank of Canada Governor Mark Carney cut borrowing costs by a quarter of a point to 2.25 percent three days ago, saying more action will likely be needed to help the economy.
Excluding gasoline and seven other volatile items, inflation accelerated 1.7 percent in September from a year earlier, matching economists' predictions, and 0.4 percent from August. Economists predicted the so-called core rate would gain 0.3 percent on a monthly basis.
Prices at gasoline filling stations were up 27 percent between September 2007 and last month, the statistics agency said. Food price inflation also accelerated in September, to 5.6 percent from a pace of 4.5 percent in August, led by a 16 percent increase in bakery and cereal products.
The price index for shelter increased 4.5 percent over the 12-month period, the agency said.
Falling prices for automobiles helped keep annual inflation from accelerating further in September, the statistics agency said. The costs of buying or leasing a vehicle fell 9.3 percent from September 2007, the biggest such drop in more than 52 years.