Canada’s annual inflation rises to 2.4% in September as gas and grocery costs climb

Canada’s inflation rate jumped to 2.4 % in September, driven primarily by smaller year-on-year declines in gasoline prices and stubborn upward pressure on grocery costs. This marks the final inflation snapshot the Bank of Canada will assess before its interest-rate decision on 29 October.

Annual inflation rose from 1.9 % in August to 2.4 % last month, slightly exceeding economists’ forecasts. Although gasoline prices continue to fall year-on-year — largely due to the removal of the consumer carbon levy — the rate of decline narrowed in September compared to August, contributing upward pressure on the headline figure. Excluding fuel, inflation came in at about 2.6 %.

At the same time, consumers faced persistent food cost inflation: fresh vegetable prices increased 1.9 % annually after a decline in August, and sugar and confectionery costs accelerated to 9.2 % from 5.8 % the previous month. The agency noted that grocery price inflation has been rising steadily since April 2024, with tight supplies of items such as beef and coffee helping to push prices higher.

Travel-tour pricing also recorded a rare month-on-month increase in September, attributed to hotel-rate hikes linked to major events in Europe and parts of the United States. National rent inflation accelerated to 4.8 % year-on-year, up from 4.5 % in August. Meanwhile, smaller annual increases in clothing and footwear helped to modestly offset some of the headline pressure.

This September release will serve as the Bank of Canada’s final inflation input before next month’s monetary-policy meeting. Core inflation measures preferred by the central bank remain elevated, with CPI-Median holding above 3 % and CPI-Trim hovering around 3 %.