OTTAWA — Canada's annual inflation rate rose to the highest in five months in September on higher prices for gasoline and food, moving closer to the central bank's target, data from Statistics Canada showed on Friday.
The annual inflation rate rose to 1.6 per cent last month from 1.4 per cent in August, the highest since April and matching economists' forecasts.
Underlying measures of inflation watched by the Bank of Canada also firmed, with CPI trim, which excludes upside and downside outliers, rising to 1.5 per cent.
CPI median, which shows the median inflation rate across CPI components, held at 1.8 per cent after the previous month was revised higher, while CPI common, which the central bank says is the best gauge of the economy's underperformance, was unchanged at 1.5 per cent.
The Bank of Canada, which is largely expected to hold interest rates at one per cent next week after two back-to-back increases, has an inflation target of two per cent.
Overall, prices were up in six of the eight major components of the consumer price index, led by a 3.8 per cent annual increase in transportation costs. That was driven by higher gasoline prices amid supply disruptions due to Hurricane Harvey.
Food prices rose 1.4 per cent, partly due to some of last year's dampening effects starting to wear off. Higher shelter costs also boosted inflation, with prices up 1.4 per cent.