OTTAWA – Canada’s annual inflation rate decreased to 2.2% in October, according to Statistics Canada. This figure is slightly above economists' expectations but down from 2.4% in September. The decline in inflation was primarily driven by lower prices for gasoline and groceries.

Gas prices fell by 4.8% in October as retailers transitioned to less expensive winter fuel blends. Additionally, global crude oil prices decreased due to concerns about oversupply. Grocery prices also saw a decline, dropping 0.6% month-over-month, marking the largest decrease since September 2020. Despite this monthly drop, food prices at grocery stores increased by 3.4% compared to the previous year, a reduction from the 4% rise noted in September.

Statistics Canada attributed the slowdown in food price growth to lower costs for certain food preparations, particularly processed foods and fresh vegetables. However, significant price increases for fresh and frozen chicken tempered this decline.

In contrast, cellular service costs experienced a rare increase, rising 7.7% annually, marking the first yearly rise since April 2023. Consumers also faced higher costs for home, mortgage, and car insurance, especially in Alberta. Over the past five years, home and mortgage insurance costs have surged by 38.9% nationally, while vehicle insurance premiums have increased by 18.9%.

The October inflation report is significant as it provides the Bank of Canada with crucial data ahead of its final interest rate decision for the year, scheduled for December 10. Currently, the central bank's benchmark interest rate is set at 2.25%, following consecutive cuts in September and October. Bank of Canada officials indicated last month that they may pause further rate cuts unless unexpected economic data emerges.