Canada's annual inflation rate rose to 3.1 per cent in September, Statistics Canada said on Monday, which according to some economists leaves the Bank of Canada in a difficult position ahead of its rate announcement later this month. The consumer price index was up 0.1 per cent last month compared to August, as war in the Middle East pushed benchmark oil prices to their highest level since May. The switch to less expensive winter blends helped ease inflation on gas prices last month, according to Statistics Canada. Pump prices jumped 27.8 per cent year-over-year. Excluding gasoline, consumer prices increased 2.2 per cent year-over-year in September. Grocery prices rose by 1.7 per cent year over year in September but this was down from the 2.8 per cent increase in August. Shelter prices rose 1.8 per cent year-over-year. The fresh data means the Bank of Canada must strike a balance ahead of its meeting later this month. A rate hike in response to stubborn energy-linked inflation could exacerbate softness elsewhere in the economy. This update shows ongoing pressure on Canadian households through higher energy costs while core measures remain moderate.
Could this affect Canadian households? Yes, higher fuel prices will increase costs for Canadians, while core inflation remains around 2%.