Inflation 1.9% in September as lower gas prices weigh on rate

The annual inflation rate was 1.9 per cent in September for a second-straight month, keeping the indicator close to the Bank of Canada’s ideal two per cent target.

Statistics Canada says, compared with last year, lower gasoline prices continued to weigh on the overall inflation rate and that last month’s reading was 2.4 per cent when pump prices were excluded.

The numbers in Statistics Canada’s latest consumer price index show inflation has now stayed at 1.9 per cent or higher for seven consecutive months.

The country’s price picture, on its own, is not applying pressure on the inflation-targeting Bank of Canada to adjust interest rates. Economists on average had expected a reading of 2.1 per cent for September, according to financial markets data firm Refinitiv.

Year-over-year price growth was also held back in September by lower costs for internet access services, tuition fees and telephone services, while Canadians paid more for mortgage interest, vehicle insurance and auto purchases.

The average of Canada’s three measures for core inflation, which are considered better gauges of underlying price pressures by omitting volatile items like gas, moved up slightly to 2.1 per cent last month from two per cent in August.