The consumer price index rose 0.1 percent in October from a year ago, following September’s 0.9 percent drop. On a monthly basis, prices fell 0.1 percent.
The Bank of Canada, led by Governor Mark Carney, has said it will keep its key interest rate at a record low 0.25 percent through June 2010 unless the inflation outlook shifts. T
Gasoline prices fell 13 percent in October from a year earlier, slower than the 23 percent annual drop in September. Food prices rose 2.3 percent, and tuition fees rose 4.1 percent.
The Bank of Canada predicted Oct. 22 that prices will advance 1 percent in the October-December period and remain below policy makers’ 2 percent target until the third quarter of 2011.
The so-called core inflation rate, which excludes gasoline and seven other volatile items, accelerated to 1.8 percent from 1.5 percent in September. The core rate rose 0.1 percent on the month. The data exceeded the median of economists’ forecasts for an annual core rate of 1.7 percent and an unchanged monthly rate.
Alcohol and tobacco prices rose 2.7 percent, and clothing and footwear rose 0.6 percent, Statistics Canada said.
Consumer prices are also being restrained by a 16 percent rise in the Canadian dollar against its U.S. counterpart this year, making imports cheaper. Bank of Canada Governor Mark Carney has said that the strong dollar is a risk to his goal of returning inflation to the bank’s 2 percent target.