The consumer price index for food was up 1.6 per cent last month, a slight slowing from the 1.8 per cent bump recorded in August. Passenger vehicle prices were up 2.7 per cent, and housing up 2.6 per cent. The soft inflation figures are the backdrop for stimulus the Bank of Canada has rolled out since the start of the pandemic, slashing its key policy rate to 0.25 per cent and snapping up government debt at an unprecedented rate. The central bank will update its economic and inflation outlook next week, but has said it won't raise its key rate from near-zero until inflation is back at its two-per-cent target. The bank's quarterly business outlook survey, released Monday, suggested companies expect inflation to remain below two per cent for the next two years.

Source: CBC News October 21, 2020 18:49 UTC