Inflation at 3.1%, and why a rate increase is back on the table
Statistics Canada released September inflation data this morning, and it sets up a closely watched Bank of Canada decision next week. Information as of Monday, October 19, 2026.
Market in 60 seconds
- Inflation. Consumer prices rose 3.1% from a year earlier in September, up from 3.0% in August. Gasoline was the driver, up 27.8% year over year. Excluding gasoline, inflation was 2.2%, down from 2.4%. Grocery prices rose 1.7%, down from 2.8%.
- Core inflation. The Bank of Canada's preferred core measures, CPI-trim and CPI-median, came in at 1.8% and 1.9%.
- Stocks. The S&P/TSX Composite closed Friday at 36,176.55, about 1.4% higher than the previous Friday's close. Energy and gold shares were among the leaders.
- Oil and gold. U.S. crude briefly moved above US$100 a barrel on Friday for the first time since September 21. The December gold contract closed at US$4,181 an ounce.
Planning point of the week: what a rate move touches
The headline number (3.1%) and the core numbers (under 2%) tell different stories. Headline inflation is being pushed up by energy prices. The question for the Bank of Canada on October 28 is whether higher energy costs spread into prices more broadly. Governor Macklem has said the risk of that has gone up, and market commentary suggests growing expectations of an increase.
You don't need to predict the outcome to review your own exposure. Three questions are worth a few minutes:
- Which of my debts have floating rates? Variable-rate mortgages, lines of credit and some business loans move with the Bank of Canada's rate.
- When do my fixed terms renew? A mortgage or business loan renewing in the next 12 months will be priced off today's rates, not the rate you locked in.
- Is my cash and short-term money earning a rate that fits its purpose? Savings and short-term GIC rates also tend to move with policy rates.
On the calendar
- Wednesday, October 28: Bank of Canada interest rate decision and Monetary Policy Report. The U.S. Federal Reserve also announces its decision that day.
- Monday, November 16: Statistics Canada releases October inflation data.
- Wednesday, December 9: Next Bank of Canada decision.
Sources: Statistics Canada, The Daily: Consumer Price Index, September 2026; TMX Money; Canadian Press market reports.
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