-Reitzes
Canada's annual rate of inflation fell in September, bringing the pace of price increases in line with the Bank of Canada's goal and ensuring policy makers' benchmark lending rate will remain on hold for the time being. September's Consumer Price Index edged down to 2% from the highest level in more than two years of 2.1% in August, led by cheaper gas and flat auto prices. Meanwhile, the core inflation, which strips out key volatile items including some energy and food products and which the Bank of Canada uses as its "operational guide" for setting interest-rate policy, came in unchanged from the preceding month at 2.1% in September. The released data did not surprise the markets, coming in line with analysts' expectations in both categories. Economists are predicting relatively subdued annual inflation figures and slightly better core data for the rest of 2014.
This week, the Bank of Canada will hold its rate-decision meeting and release the quarterly Monetary Policy Report, a document that accesses domestic and global economic trends, as well as updates forecasts for growth and inflation trends. The central bank has kept its benchmark lending level at 1% since September 2010, and most analysts have ruled out any lift in the rate until around mid-2015.
© Dukascopy Bank SA