Canada's annual core inflation dipped below the Bank of Canada's 2 percent target in October for the first time in 16 months, fuelling market expectations the bank may cut interest rates as early as December. Statistics Canada said on Tuesday the core rate, which excludes volatile items like gasoline and food, slowed to 1.8 percent from 2.0 percent in September, its lowest since June 2006.
Overall annual inflation also unexpectedly eased to 2.4 percent from 2.5 percent in September as price discounts on passenger vehicles offset rising gasoline costs in the 12-month period. "Clearly inflation has not been the beast that the Bank of Canada had thought it would be," said Eric Lascelles, strategist at TD Securities in Toronto.
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