Canada: Inflation still not cooperating with the Bank of Canada

The respite from rising prices was brief in Canada. After declining in August, the headline consumer price index increased 0.1% in September, leaving the annual rate of inflation at 6.9%. The persistence of inflation means that the Bank of Canada’s job isn’t done yet. The Bank of Canada’s most recent consumer survey showed accelerating short-term inflation expectations, which is keeping policymakers concerned, even though long-term inflation expectations remain relatively anchored. As a result, expect a rate hike of at least 75bp next week.