Canada’s annual inflation rate rose to 3.1 per cent in September, driven mainly by higher gasoline and diesel prices, Statistics Canada reported Monday.
The rate increased from 3 per cent in August but came in below economists’ expectations of 3.2 per cent. It also moved above the Bank of Canada’s 3 per cent upper inflation target for the first time in four months.
Energy prices rose 19 per cent compared with a year earlier, pushing gasoline prices up 27.8 per cent. Without gasoline price increases, inflation would have been 2.2 per cent.
Grocery prices continued to rise at a slower pace, increasing 1.7 per cent annually. Meanwhile, shelter prices rose 1.8 per cent, while rents increased 2.8 per cent.
The September report is the last inflation update before the Bank of Canada’s interest rate decision on Oct. 28.
Financial markets expect the central bank to keep its key interest rate at 2.25 per cent this month, although some investors expect a possible increase in December.
Desjardins economist Royce Mendes said the recent economic slowdown could allow the bank to hold rates steady while waiting for inflation to return to its target.
