macro

Canadian Inflation Rises to 3.1% in September on Higher Gasoline Prices

Canada's annual inflation reached 3.1% in September on a sharp jump in energy costs, while core measures slowed to a six-year low.

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what happened

Statistics Canada said the consumer price index rose 0.1% in September, lifting the annual inflation rate to 3.1% from 3% in August. That was slightly below the 3.2% economists had expected, but still above the top of the Bank of Canada's 1% to 3% target range.

Energy prices climbed 19% year over year, with gasoline up 27.8%. Excluding gasoline, inflation eased to 2.2% from 2.4%, and the trimmed mean and weighted median measures favored by the central bank averaged 1.85%, a six-year low.

The softer figures weaken market bets on a rate hike at next week's meeting, although Governor Tiff Macklem's weekend remarks were seen as hawkish.

why it matters

Markets had increasingly priced in a Bank of Canada rate increase, and this softer report reduces the odds of a move at the next meeting. For the Canadian dollar, that points to pressure as expectations shift toward lower rates, while oil prices remain the key driver of inflation.

market impact

Canadian dollar and bonds: softer core inflation lowers hike odds, pressuring CAD

tags

instruments

USD/CADCADCanadian bondsBank of Canada rateWTIBrent

sources

  1. Canada Inflation Heats Up in September With Jump in Gas Prices — 2nd Update — Dow Jones Newswires, 19 October 2026 at 15:09 UTC

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