BCREA ECONOMICS NOW. Candian Inflation - November 18, 2011
Canadian CPI inflation increased 2.9 per cent in October, a 0.3 point decline from last month. Once again, inflation was lead by higher prices for gasoline and food which increased 18.2 per cent and 4.3 per cent on a year over year basis. The Bank of Canada's core inflation measure, which excludes food and energy prices, rose at a rate of 2.1 per cent, down from 2.2 per cent in September. Consumer prices in BC rose 2.4 per cent in September (year-over-year) following a 2.1 per cent increase in August.
Although economic growth my surprise on the upside for the third quarter, headline and core inflation are in line with the Bank of Canada's expectations of slower inflation over the next 12 months. We expect that monetary policy will be more tied to risks in the global economy, which are still strongly tilted to the downside, than to month to month movements in inflation. As a result, the Bank of Canada sidelined for an extended period.
Although economic growth my surprise on the upside for the third quarter, headline and core inflation are in line with the Bank of Canada's expectations of slower inflation over the next 12 months. We expect that monetary policy will be more tied to risks in the global economy, which are still strongly tilted to the downside, than to month to month movements in inflation. As a result, the Bank of Canada sidelined for an extended period.
For more information, please contact:
| Cameron Muir | Brendon Ogmundson |
| Chief Economist | Economist |
| Direct: 604.742.2780 | Direct: 604.742.2796 |
| Mobile: 778.229.1884 | Mobile: 604.505.6793 |
| Email: cmuir@bcrea.bc.ca | Email: bogmundson@bcrea.bc.ca |
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