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Canada’s Inflation Ticks Higher — But Could Rate Cuts Be Around the Corner?

Canada’s inflation rate rose to 2.4% in September, surpassing economists’ expectations of 2.2% — a small but significant signal that the economy is still finding its footing after years of turbulence.

According to Statistics Canada, the uptick came as gasoline and travel costs declined more slowly, while grocery prices climbed 4% year-over-year — the steepest increase since April 2024. Fresh vegetables, sugar, and confectionary were among the biggest drivers, with households feeling the pinch every time they step into a supermarket.

While inflation remains above target, the broader trend suggests that price pressures are moderating, paving the way for the Bank of Canada’s next potential rate cut. Money markets now peg the odds of a 25-basis-point cut on October 29 at over 86%, which would bring the benchmark policy rate down to 2.25% — the lowest since mid-2023.

💡 What’s driving the numbers:

  • Gasoline: Prices continued to fall year-over-year after Ottawa scrapped the carbon levy, but the drop was smaller than last month due to a sharp decline in global oil prices a year earlier.
  • Core Inflation: The Bank of Canada’s preferred measure, CPI-median, stayed flat at 3.2%, while CPI-trim edged up slightly to 3.1%.
  • Shelter Costs: Rents rose 4.8%, pushing shelter inflation — the largest component of the CPI basket — to 2.6%.

Despite higher grocery and rent costs, economists say the overall trend supports a gentle cooling of inflation — a key condition for further rate relief.

🏠 What This Means for Borrowers and Investors

For homeowners and mortgage investors, this could mark the start of a new lending cycle. If the Bank of Canada follows through with another rate cut, Canadians could see lower borrowing costs, softer fixed-rate mortgage terms, and renewed momentum in housing markets across Ontario and beyond.

At Lendworth, we believe moments like these define opportunity. When traditional lenders hesitate, private mortgage lending and MIC investments often thrive — turning rate shifts into real returns for investors and real options for borrowers.

➡️ Stay ahead of the rate cycle.

Learn how to protect your wealth and grow your equity as Canada enters a new phase of easing.

📍Visit lendworth.ca — Your equity deserves more™

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