Canada’s inflation rate has seen a notable decrease, slowing to 3.1% in October, down from 3.8% in September, as reported by Statistics Canada. This change reflects a significant drop in gasoline prices and comes ahead of the federal government’s fall economic update.
In a detailed report released Tuesday, Statistics Canada highlighted that the primary factor behind the deceleration in the cost of living was a substantial 7.8% decrease in gasoline prices from the previous year. The decline in gasoline costs alone contributed significantly to the reduced inflation rate. If gasoline were excluded, the inflation rate would have been 3.6% in October, a slight dip from September’s 3.7%.
The agency noted that the largest contributors to the inflation figures for October continued to be mortgage interest costs, food purchased from stores, and rent. While the overall inflation rate has shown a decline, these essential areas of spending continue to pressure household budgets.
Interestingly, food prices, particularly grocery items, have also seen a slowdown in their rate of increase. Grocery prices were up 5.4% in October, a deceleration from the 5.8% increase observed in September. This marks the fourth consecutive month of deceleration in grocery price increases, providing a slight reprieve for Canadian consumers.
The report also mentioned that rent prices have surged, recording an 8.4% increase over the past year, marking the fastest pace in recent years. This increase, up from 7.3% in September, adds to the complexities of the current economic landscape.
The slight easing in the inflation rate, however, still positions it above the Bank of Canada’s target range. The central bank, which has been closely monitoring inflation dynamics, may find these latest figures to be critical in shaping its upcoming policy decisions.
The slowdown in the inflation rate is a crucial development as the federal government prepares for its fall economic update. This update is expected to provide further insights into the government’s fiscal strategy in the face of ongoing economic challenges.