Canada’s inflation rate drops in October

November 19th, 2011 - 3:24 pm ICT by IANS  

Ottawa, Nov 19 (IANS) Canada’s inflation rate dropped to 2.9 percent in October from 3.2 percent in the previous month, largely due to the less gain of energy prices, Statistics Canada said.

Energy prices increased 11.7 percent during the 12 months to October, easing from the 12.5 percent gain in September, Statistics Canada said Friday.

On a year-over-year basis, gasoline prices rose 18.2 percent, after advancing 22.7 percent in September, reported Xinhua.

Food prices continued to post a 4.3 percent increase, same as the previous month.

“On a year-over-year basis, inflation is starting to come down as a spike in energy and food costs last year starts to roll off,” Scotiabank economists Derek Holt and Karen Cordes Woods said.

Excluding food and energy, the Consumer Price Index (CPI) increased 1.5 percent in the 12 months to October, following a 1.9 percent advance the month before.

Bank of Canada’s core index rose 2.1 percent in October from one year ago, slightly less than a 2.2 percent gain in September.

The core index strips out volatile food and energy prices, and is the baseline the Bank of Canada pays closer attention to in making its interest rate decisions.

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