Inflation in Canada unexpectedly accelerates on shelter costs

Inflation jumps after rising clothing and food prices

The increase was mainly due to the prices of clothing and shoes, which had risen 2.8 percent compared to 0.9 percent in the previous year, as well as food and furnishings.

The Canadian dollar rose against the greenback on Wednesday as positive news on a COVID-19 vaccine boosted oil prices and after data showing higher underlying inflation supported the Bank of Canada's decision to cut back on emergency stimulus measures.

"The cost of food also nudged up, while second-hand cars and computer games also all saw price rises".

The ONS said prices for clothes rose in October, returning to their normal seasonal pattern after disruption this year caused by the coronavirus lockdown.

Transport and vehicle prices also pushed higher, as the price of second-hand cars rose by 1.4 per cent, with new auto prices up 0.5 per cent as demand for cars improved in the face of guidance to avoid public transport.

It affects everything from mortgages to the cost of our shopping and the price of train tickets.

Inflation crept up last month as rising food and clothing prices put more pressure on families.

Economists at the ONS said clothing and footwear prices increased by 2.5% for the month, rebounding after a period of heavy discounting through the summer as stores tried to attract more customers in the face of restrictions.

Average house prices increased over the year by 4.9% in England, 3.8% in Wales, 4.3% in Scotland, and 2.4% in Northern Ireland.

Second-hand auto prices also rose in October as people tried to reduce their reliance on public transport. That was the strongest gain for an October in the index's 22 years.

USA crude prices were up 1.2% at $41.94 a barrel, while the Canadian dollar was trading 0.1% higher at 1.3090 to the greenback, or 76.39 US cents.

Paul Stockwell, chief commercial officer at Gatehouse Bank, commented: "As predicted, house price growth has intensified in September fuelled by pent-up demand coupled with significant cost-savings to buyers presented by the stamp duty holiday".

Inflation may have ticked up in October but delve into the figures and you're reminded: it's not the risk of inflation that looms large right now but the opposite.

There's not a lot the Bank of England can do here to stimulate activity when the battle against Covid is pulling in the other direction.