MONTREAL – The Bank of Canada’s next rate decision is likely to hinge on developments in the medium-term inflation outlook, with September CPI figures expected to provide key guidance for policymakers.
An economists’ poll forecast headline inflation at 2.2% y/y in September, up from 1.9% in August, while prices are expected to fall 0.1% on the month. Core inflation is projected to stay firm, with CPI-median easing slightly to 3.0% and CPI-trim holding steady at 3.0%.
Experts say base effects are driving the headline acceleration. BMO’s Benjamin Reitzes noted that although consumer prices likely fell modestly in September, a sharper decline a year ago pushed the annual rate higher — marking the first reading above 2% since March.
“The large differential versus last year is being driven by gasoline prices, which rose just under 2% in the month, compared with a 7.1% plunge in September 2024,” he wrote.
The BoC has repeatedly flagged stickiness in underlying inflation, especially in CPI-trim and median. TD Securities expects these measures to remain broadly stable from August, highlighting that three-month rates continue to point to softening momentum, even as annual readings sit at the top end of the BoC’s target range.
Modest improvement in business sentiment
A day before the CPI release, the BoC’s Q3 Business Outlook Survey pointed to a gradual but modest improvement in business sentiment. Firms said tariffs and trade uncertainty continue to lift costs, but weak demand limits pricing power. One-year inflation expectations have eased from earlier peaks and are now only slightly above late-2024 levels.
Reitzes added that the removal of retaliatory tariffs on most US goods imports at the start of the month could shave a tick or two off inflation, though the full effect may take time to filter through.
The BoC policymakers cut rates by 25bp in September after holding since April, citing weaker growth and receding inflation risks. TD Securities said: “Further moderation across core inflation measures should allow the Bank to continue easing into the fall. The Bank’s well-established history of moving twice in a row after an extended pause leaves a low threshold for a follow-up cut.”
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function check_channel_status_response(data) {
postMessage({ action: 'CheckChannelStatusReponse', stream_status: data.stream_status.status, onair: data.stream_status.onair, connected: data.stream_status.connected });
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function join_publisher_channel(data) {
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socket.send(msg_string); }
postMessage({action: 'PublisherChannelJoined' });
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function session_info_interval() {
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logging_interval = setTimeout(session_info_interval,logging_interval_time);
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session_info.application_name = data.application_name;
session_info.http_referrer = data.http_referrer;
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function start_log() {
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session_start_time = session_start_date.getTime();
var months = ['Jan','Feb','Mar','Apr','May','Jun','Jul','Aug','Sep','Oct','Nov','Dec'];
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session_info.effective_latency = data.effective_latency;
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data_array.curr_delay = session_info.curr_delay;
data_array.session_length = session_info.session_length;
data_array.date = current_time;
data_array.webrtc_protocol = session_info.protocol;
data_array.ping_time = session_info.ping_time;
data_array.jitter = session_info.jitter;
data_array.packet_loss = session_info.packet_loss;
data_array.effective_latency = session_info.effective_latency;
data_array.mean_opinion_score = session_info.mean_opinion_score;
data_array.stream = session_info.stream;
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- CPI expected back above 2% as BoC weighs next move
- Business sentiment improving but pricing power remains weak
-Tariff removal may ease price pressures in coming months
By Harry Daniels
LiveSquawk News
@HarryDaniels71
20 October 2025 | 20:00 BST
MONTREAL – The Bank of Canada’s next rate decision is likely to hinge on developments in the medium-term inflation outlook, with September CPI figures expected to provide key guidance for policymakers.
An economists’ poll forecast headline inflation at 2.2% y/y in September, up from 1.9% in August, while prices are expected to fall 0.1% on the month. Core inflation is projected to stay firm, with CPI-median easing slightly to 3.0% and CPI-trim holding steady at 3.0%.
Experts say base effects are driving the headline acceleration. BMO’s Benjamin Reitzes noted that although consumer prices likely fell modestly in September, a sharper decline a year ago pushed the annual rate higher — marking the first reading above 2% since March.
“The large differential versus last year is being driven by gasoline prices, which rose just under 2% in the month, compared with a 7.1% plunge in September 2024,” he wrote.
The BoC has repeatedly flagged stickiness in underlying inflation, especially in CPI-trim and median. TD Securities expects these measures to remain broadly stable from August, highlighting that three-month rates continue to point to softening momentum, even as annual readings sit at the top end of the BoC’s target range.
A day before the CPI release, the BoC’s Q3 Business Outlook Survey pointed to a gradual but modest improvement in business sentiment. Firms said tariffs and trade uncertainty continue to lift costs, but weak demand limits pricing power. One-year inflation expectations have eased from earlier peaks and are now only slightly above late-2024 levels.
Reitzes added that the removal of retaliatory tariffs on most US goods imports at the start of the month could shave a tick or two off inflation, though the full effect may take time to filter through.
The BoC policymakers cut rates by 25bp in September after holding since April, citing weaker growth and receding inflation risks. TD Securities said: “Further moderation across core inflation measures should allow the Bank to continue easing into the fall. The Bank’s well-established history of moving twice in a row after an extended pause leaves a low threshold for a follow-up cut.”