Monthly gain was similar to levels seen in September
Canada’s annual inflation rate held steady at an annualized pace of 6.9% in October, and with various key measures like gasoline prices trending higher, economists warned that the elevated levels are likely to compel the central bank to remain on its rate-hike trajectory.
The 0.7% monthly gain was identical to that seen in September, suggesting that bringing down inflation is “going to be a marathon, it’s not going to be a sprint,” said Jimmy Jean, chief economist at Desjardins Securities.
“It’s going to take time before we see some conclusive evidence” of moderation in price pressures, Jean told BNN Bloomberg.
Read more: BoC’s Macklem: Labour market rebalancing needed to counter inflation
The Bank of Canada raised its benchmark policy rate by 3.5% from March to October, in what is now considered one of its most aggressive hiking campaigns ever.
Industry players are anticipating an increase of at least 25 basis points at the BoC’s next policy decision on December 7.
Governor Tiff Macklem recently said that the central bank could deliver another outsized increase to interest rates, although it could also just as easily revert to a more traditional pacing.
“We indicated that we expect interest rates do have further to go, and I think that could be another bigger-than-normal step or it could be reverting to more normal 25-basis-point steps,” Macklem said. “We’ll see.”
