TORONTO — The latest inflation reading due out Tuesday from Statistics Canada is expected to show a slight uptick for the month of October — but economists say the measure is still on a longer-term downward trend.
Economists polled by Reuters expect the consumer price index to come in at 1.9 per cent for October, up from 1.6 per cent in September which was the lowest inflation reading since February 2021.
The expected inflation increase is in part based on shifts in last year's baseline and shouldn't be seen as a move away from progress on getting the measure down, she said. BMO Capital Markets sees headline inflation coming in at 1.9 per cent and core inflation at 2.4 or 2.5 per cent, said Benjamin Reitzes, its managing director of Canadian rates & macro strategist, in a note.
High mortgage payments due to interest rates and a wave of mortgage renewals have been putting upward pressure on shelter inflation, but the downward trend in rates should start to relieve pressure on shelter inflation, said Fan.The Bank of Canada lowered its key rate by half a percentage point in October to 3.75 per cent, the fourth drop since June.
Rent inflation, which aims to measure what Canadians actually pay in rent rather than just the cost of new rentals, is expected to come down, but not in a hurry. As the two economies diverge, the Canadian dollar has been under pressure, trading at lows not seen since 2020.
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