MNI DATA IMPACT: Canada Inflation Lags Forecast on Tuition Cut>

By Greg Quinn and Anahita Alinejad

     OTTAWA (MNI) - Canadian consumer price inflation advanced 1.9% in

September, lagging forecasts with an index of school tuition declining

for the time since 1973 as Ontario lowered fees. Core prices advanced

2.1%, one of the strongest readings in years.

     The headline advance lagged the 2.1% MNI economist median for

year-over year inflation. Consumer prices fell 0.4% on a monthly basis

in September, the most since November 2018, and by more than the 0.2%

MNI median.

     Combined with gains of 1.9% in August and 2.0% in July, inflation

over the third quarter averaged 1.9%. That's ahead of the Bank of

Canada's forecast for third-quarter inflation of 1.6%. Price gains

close to the BOC's 2% target are one reason policy makers have resisted

cutting interest rates this year amid a U.S.-China trade war.

     This is the last inflation report before the BOC's Oct. 30

decision. The MNI economist median has switched in the last week to show

no change in the 1.75% overnight rate, removing prior calls for a cut,

amid strong domestic data.

     The average of the three core inflation indexes was 2.1% in

September, matching readings in May and July that were the fastest since

2012.

     Tuition fees declined by 3.6% in September as the Ontario

provincial government mandated a reduction, Statistics Canada said

Wednesday from Ottawa. That was a drag on both the one-month and

year-over-year price indexes.

     Consumer prices were also held back from a year ago by a 10% fall

in gasoline and a 7.9% decline in internet service fees. On the other

side, mortgage interest costs climbed 7.5% and car insurance rates

jumped 8.9%.  

--MNI Ottawa Bureau +1 613-314-9647; greg.quinn@marketnews.com

     [TOPICS: MACDS$,M$C$$$,MAUDR$]