Canada's Core Inflation Hots Up, Bank of Canada Behind the Curve

Core inflation in Canada continues to rise, with a m/m SAAR of 3.9% for traditional core CPI (ex-food and energy) being its hottest reading since April 2025.

This measure has been above the 2% inflation target for several instances, suggesting that the Bank of Canada is behind the curve in fighting inflation.

The three-month moving average is 3.6% m/m SAAR and the four-month moving average is also at 3.6%, which is the hottest since November 2023.

This strong core inflation data supports a rate hike at the October meeting, further indicating that the Bank of Canada may be playing catch-up in its inflation-fighting efforts.