Citi: Soft inflation likely to keep the Bank of Canada on hold

Citigroup analyst Veronica Clark noted that both headline and core inflation in Canada for September came in below expectations, making it difficult for the Bank of Canada to justify a rate hike next week and undermining its data-dependent policy-making principles. Clark said that while the annual inflation rate edged up to 3.1%, this was almost entirely due to higher gasoline prices, while food prices were surprisingly moderate, which may encourage policymakers. The economist continues to believe that with excess supply in the economy, weak demand will keep price pressures contained, and interest rates will remain unchanged for the remainder of the year.