Canadian Consumer Prices Expand for the First Time in 5 Months

The Canadian consumer price index rose at an annual rate of 0.1% in October to end the longest slump since 1953, while price pressures weakened 0.1% during the month, led by lower energy prices. The breakdown of the report showed gasoline prices shed13% in October from a year earlier versus the 23% annualized plunged in September, while tuition fees and food prices climbed 4.1% and 2.3% successively during the same time period. At the same time, the core rate of inflation advanced at an annualized pace of 1.8% from 1.5% in the previous month with expectations of a 1.7% gain.  Looking ahead, as the Bank of Canada maintains a dovish outlook for inflation and continues to see a risk for a protracted recovery, the central bank is widely expected to keep interest rates at a quarter of a percent at the policy meeting on December 8th as policy makers project price growth to hold below the 2% target until the third quarter of 2011.