Canada’s annual inflation rate unexpectedly rises to 4.7%

Canada’s annual inflation rate unexpectedly rose to 4.7% in October from 4.4% in September, Statistics Canada said on Friday.

Economists polled by Reuters had expected a pace of 4.5%. However, October’s result was the lowest since a revised 4.0% for the year-to-date ending August, when Statistics Canada dropped the rate to 4.8% from 4.9%.

Inflation in September was driven by a 4.5% annual increase in food prices. It was the fastest pace since 5.0% in March 2012.

Canada’s annual inflation rate last rose above 5% in May 2015, when it was 6.0%. The Bank of Canada targets a core inflation rate of 2.0%.

New figures show some signs the central bank’s low-interest-rate policy is beginning to influence household spending. The economy grew 1.5% in April from March, compared with expectations for a 0.6% gain.

The central bank has raised rates twice this year but is not expected to hike again until the second half of next year.

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