Lower-than-expected CPI means pressure on Bank of Canada

The Bank of Canada received some good news on the inflation front on Tuesday, with September data showing that core measures of the consumer price index, which does not take into account volatile price items like food and fuel, increased at their slowest pace in 31 months, according to National Bank Financial. . The data “removes a lot of pressure on the BOC to make more” interest rate increases, according to the company. The Bank of Canada now faces a rate policy dilemma: remaining focused on high inflation, with potentially more rate hikes, while other indicators suggest business and consumer confidence is at levels usually observed during recessions. “It would be perilous for the BOC to remain focused on persistent inflation with real key rates” at their most restrictive level since 2008, says National Bank Financial.