Canada’s September CPI report mirrored hotter than anticipated inflationary pressures for the month, main market gamers to tone down dovish BOC expectations.

Headline inflation charge rose to 2.4% year-over-year in September, up from 1.9% in August, as gasoline costs declined much less sharply and journey tour prices rebounded. On a month-over-month foundation, headline CPI rose 0.1% as an alternative of dipping by one other 0.1%.

Core measures confirmed that roughly one-third to 40% of the CPI basket is experiencing worth development above 3-4% on an annualized month-to-month foundation, suggesting inflation pressures stay comparatively contained however not totally extinguished.

Key Takeaways

• Headline CPI elevated to 2.4% y/y in September from 1.9% in August, exceeding consensus expectations of two.2%
• Core inflation measures remained elevated, with each trimmed imply and weighted median at 2.8% on a month-over-month seasonally adjusted foundation
• Gasoline costs fell 4.1% y/y, a smaller decline than August’s 12.7% drop, contributing considerably to the headline acceleration
• Grocery costs rose 4.0% y/y, up from 3.5% in August, marking the quickest tempo for the reason that latest low in April 2024
• Journey tour costs declined simply 1.3% y/y in comparison with a 9.3% drop in August, as seasonal components and better resort prices throughout main occasions pushed costs up
• Hire inflation accelerated to 4.8% y/y from 4.5%, pushed largely by Quebec’s 9.6% enhance, notably in Montreal
• On a month-to-month foundation, CPI rose 0.1% (not seasonally adjusted) and 0.4% (seasonally adjusted)

Hyperlink to official Statistics Canada Client Worth Index (September 2025) 

Gasoline costs rose 1.9% month-over-month in September 2025, following refinery disruptions and upkeep in each america and Canada. This contrasted sharply with September 2024, when costs fell 7.1% amid considerations about weakening financial development in China and the U.S.

Grocery worth inflation accelerated to 4.0% year-over-year, with notable will increase in recent greens (rising 1.9% after declining 2.0% in August) and sugar and confectionery (up 9.2% versus 5.8% beforehand). Recent or frozen beef and low costs additionally contributed to the acceleration, partly reflecting provide constraints.

Shelter prices rose 2.6% y/y, with hire costs advancing 4.8% nationally regardless of combined provincial dynamics. Mortgage curiosity prices elevated 3.6% y/y, whereas householders’ substitute prices fell 1.4%, reflecting the offsetting dynamics inside the shelter element.

Market Reactions

Canadian Greenback vs. Main Currencies: 5-min

Overlay of CAD vs. Main Currencies Chart by TradingView

The Canadian greenback rallied throughout the board following the hotter-than-expected inflation print, with the information probably prompting merchants to reassess the chances of one other BOC charge minimize at subsequent week’s assembly.

CAD/JPY posted the strongest good points, rising roughly 0.71% whereas GBP/CAD slipped roughly 0.41%. USD/CAD dipped 0.31% and AUD/CAD fell 0.22%, as good points towards fellow commodity currencies had been restricted. In opposition to the Kiwi, the Loonie rapidly erased its winnings and even wound up 0.14% within the purple a number of hours after the CPI launch.