Canada’s Inflation Rate Suddenly Increases to 0.7% in October as Shelter Costs Accelerate

It appears that inflation levels in Canada surprisingly surpassed expectations for the month of October, despite ongoing struggles with the country’s economic recovery and a resurgence of coronavirus cases.

According to the latest Statistics Canada data, annual inflation grew from 0.5% to 0.7% in October, which exceeded forecasts of the 0.4% inflation level projected by economists surveyed by Bloomberg. On a month-over-month basis, prices increased by 0.4%, which is 0.2% more than the median forecast. The sudden rise in inflation was largely due to rising home ownership costs, which according to the homeowners’ index, jumped by 1.4%, the biggest monthly increase since the early 1990s.

However, despite the increase in inflation, price pressures remain subdued due to ongoing economic recovery struggles and the reintroduction of restrictions in certain regions across Canada. As a result, the Bank of Canada is anticipating that the continued gap in economic output and the labour market will keep inflation levels under the 2% target rate until at least 2023.

Information for this briefing was found via Statistics Canada and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.