Canada’s CPI rose in September, with food, rent, property taxes, and mortgage interest leading the gains. What raised eyebrows is what was not highlighted – the Bank of Canada’s preferred core inflation metrics. Here is a clear, data-focused look at what the latest CPI means.
Key takeaways
- Headline CPI: Up 0.5 percentage points to 2.4% in September
- CPI ex-gasoline: 2.6%
- Big drivers: Food (+3.8% y/y), rent (+4.8%), property taxes (+6.0%), mortgage interest (+3.6%)
- Core measures (BoC focus): CPI-common 2.7%, CPI-median 3.2%, CPI-trim 3.1% – all estimates that suggest underlying inflation pressures remain elevated relative to a 2% target
Note: All figures are as described in the source text. Core inflation readings are widely followed indicators used by the Bank of Canada to assess underlying price trends.
September CPI – headline rose as gasoline effects faded
Headline inflation accelerated to 2.4%, rising 0.5 percentage points from August as earlier gasoline-related drags eased. Excluding gasoline, CPI ex-gasoline came in at 2.6%, reinforcing that energy base effects are no longer masking broader price pressures.
What pushed prices higher
- Food: +3.8% y/y – persistent grocery inflation continues to strain household budgets
- Rent: +4.8% – tight rental markets and population growth keep pressure on shelter costs
- Property taxes: +6.0% – municipal levies contributed to shelter inflation
- Mortgage interest: +3.6% – borrowing costs remain a significant component of shelter inflation
Mortgage interest costs can move with changes in policy rates and bond yields. Recent rate moves and fixed-rate dynamics can transmit into CPI through this line, sometimes in ways that differ from popular expectations.
The missing piece – where were the BoC’s core metrics
Market watchers noted that discussion around the Bank of Canada’s preferred core measures received less emphasis than usual. Based on the figures referenced in the source text:
- CPI-common: 2.7%
- CPI-median: 3.2%
- CPI-trim: 3.1%
These indicators attempt to filter out volatile components to gauge underlying inflation. Readings above 3% for median and trim suggest underlying pressures are still above the upper end of the BoC’s 1 to 3% control range.
Why this matters for policy
When headline CPI rises while core measures remain firm, it complicates the policy outlook. If underlying inflation is not clearly returning to 2%, the path for additional rate cuts can become less straightforward. Markets and households should monitor:
- The direction of core inflation over the next few releases
- Shelter components – rent, mortgage interest, and property taxes
- Energy base effects – whether gasoline continues to be a neutral factor rather than a drag
Bottom line
September’s data indicate that inflation pressures persist beyond gasoline. With core measures still elevated, the focus shifts to whether underlying inflation trends ease in coming months. Until there is consistent progress toward 2%, the policy path may remain uncertain.
Sources and methodology
- Figures and category details are based on the provided summary of Statistics Canada’s Consumer Price Index for September 2025 and commonly referenced Bank of Canada core inflation measures.
- https://betterdwelling.com/canadian-inflation-soars-but-more-alarming-is-what-wasnt-mentioned/
- This article offers general information for readers and is not financial advice.
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