Canada’s inflation rate is expected to have experienced another decrease in October as a result of lower gasoline prices and slower increases in grocery prices. The consumer price index report from Statistics Canada is set to be released on Nov. 21, which aligns with the federal government’s fall economic statement. BMO forecasts the annual rate to come in at 3.2 percent for October, while RBC is expecting the rate to have decreased to 3.1 percent, down from the 3.8 percent rate in September.
A further decline in the inflation rate would be welcome news for the Bank of Canada, as it seeks confirmation of a sustained slowdown in consumer price growth. The central bank had chosen to maintain its key interest rate at five percent during its previous two decision meetings, largely due to ongoing weak economic data. The current economic climate has warranted cautious decision-making, and a decrease in the inflation rate would provide a positive signal for the overall economic outlook.