Inflation in Canada: annual rate slowed in September [Video]

OTTAWA –

The chances of a half-percentage point interest rate cut by the Bank of Canada became more likely Tuesday after Statistics Canada reported annual inflation fell to 1.6 per cent in September.

Economist Tu Nguyen of accounting and consultancy firm RSM Canada said she had expected the inflation rate to remain close to the central bank’s two per cent target, where it was in August, for a few more months.

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“This is one of the instances where I’m happy to be wrong,” she said.

Nguyen said while the Bank of Canada has favoured a slow and gradual pace of 25-basis-point cuts each time, the inflation report raises the odds of a 50-basis-point reduction.

“It’s clear that we are well behind the curve when it comes to rate cuts,” she said.

The inflation report is the last …