Canada’s 1.6 Percent Inflation Raises Hopes for Sizable Upcoming Interest Rate Cut

With Canada’s inflation rate falling to 1.6 percent in September, lower than the Bank of Canada’s target of 2 percent, there are increasing expectations that steeper interest rate cuts could be likely. Statistics Canada reported on Oct. 15 that the latest inflation numbers were the consumer price index’s smallest year-over-year increase since February 2021. The agency said the 1.6 percent inflation rate was driven by lower gasoline prices, and said inflation excluding that metric was the same as August’s at 2.2 percent. The agency noted that gasoline prices fell by 1.6 percent in August and 7.1 percent in September, with the September decline being due to declining crude oil prices amid concerns over weaker economic growth, and the lower costs of the blends used in the colder season. Air transportation prices fell by 14.3 percent in September as the summer travel period came to an end....