Canada Inflation Drops to 1.6% in September

Canada's annual inflation rate fell to 1.6% in September, lower than the expected 1.8%, primarily due to decreased prices for gasoline and air transportation. This significant drop in inflation has led to speculation about a likely 50 basis point interest rate cut by the Bank of Canada, with market expectations now at nearly 80%. Concurrently, the Canadian Dollar weakened against the Pound and US Dollar, with GBP/CAD nearing 2024 highs. In the UK, wage growth slowed to 4.9%, down from 5.1%, while unemployment decreased to 4.0%, indicating a tighter labor market amidst ongoing economic uncertainties. Analysts suggest that the Bank of England may also consider further rate cuts due to easing wage growth and inflation pressures. Both central banks are navigating delicate economic landscapes as they respond to evolving inflation data and labor market conditions.