The slowdown was widely expected by financial analysts, and much of the relief came from cheaper fuel. Petrol prices dropped sharply compared with the same time last year, helping pull the overall inflation rate lower.
But while the headline figure looks encouraging, the broader picture is more complicated. When petrol is excluded, inflation held steady at 2.6 per cent, the same pace as in September. This shows that many essential goods and services continue to climb in price, leaving consumers still feeling the pinch even as the overall rate moves closer to the Bank of Canada’s target range.
Economists say October’s numbers provide little reason for the Bank of Canada to adjust interest rates in the near future. Inflation is cooling, but not quickly enough to justify more cuts, especially with some categories posting strong price increases. Over five years, the increases are even more stark: nearly 39 per cent higher for home insurance and almost 19 per cent more for vehicle coverage. These increases have become a major pressure point for households.
Wireless phone bills also jumped, rising 7.7 per cent compared with last year. It marks the first annual increase in this category in more than two years, driven largely by price hikes from major carriers. Combined wireless and wireline services are now nearly 8 per cent more expensive than a year ago — the fastest rise seen since the early 1980s.
Not all categories are adding pressure. Natural gas prices fell 17 per cent, and grocery inflation continued to moderate, slowing to 3.4 per cent from 4 per cent in September. Even so, food costs remain higher than the overall inflation rate for the ninth month in a row, underscoring how persistent grocery price rises have become.
Market expectations now place the likelihood of another rate cut before April at roughly 30 per cent. Analysts note that while inflation has slowed, a meaningful shift in interest rate policy would require clear signs of economic weakness or a more sustained drop in price pressures.
Some experts also warn that the inflation rate could edge higher in the coming months simply because prices fell late last year, making year-over-year comparisons look steeper. This wouldn’t signal new price pressure — just the quirks of the math behind inflation calculations.
For everyday Canadians, the October report offers cautious optimism. The pace of price increases is cooling, but the cost of many essentials remains elevated. Until more categories show consistent easing, households may find that inflation, while slower, still feels stubbornly present.
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