Consumer Price Index (Oct.)

Although the official measure of core inflation, which dipped from 2.2% to 2.1% in October, might stay slightly above the Bank of Canada's target of 2% in the near term, this is not a big concern. That measure only excludes fresh food. Excluding all food and energy, inflation dropped back to a more modest 1.5% last month, from 1.9%.  Accordingly, the rate of underlying inflation should not prevent the Bank of Canada cutting its key policy rate to 0.50% next year, as economic growth slows and the unemployment rate begins to drift higher.