Consumer Price Index, October 2022

Consumer Price Index

The latest inflation figures from Statistics Canada have given some market participants hope that the Bank of Canada will slow or even halt interest rate increases.

The Consumer Price Index, or “headline inflation,” remained stable at 6.9% year on year from September to October. Higher gasoline prices are offset by lower food price inflation. Another encouraging sign was that core inflation, which excludes volatile items like food and fuel, slowed to 5.3% year on year in October, down from 5.4% in September. The Bank of Canada bases interest rate decisions on the core inflation reading.

Those figures, however, will likely provide little solace to homeowners and homebuyers who have faced some significant inflationary increases.

According to StatsCan, mortgage interest rates increased by 11.4% in October, the largest year-over-year increase since February 1991 (11.7%). Property taxes also increased dramatically, rising 3.6% from a year ago to 1.5%.

The “homeowners’ replacement cost index,” which measures the cost of new homes, fell to 6.9% in October from 7.7% in September, according to StatsCan. Since May, this metric has been declining (11.1%).

Looking ahead to December 7th and the Bank of Canada’s final interest rate announcement of the year, most analysts anticipate another 25 to 50 basis-point hike.

Read the full statement here.