Monday's CPI, Business Survey to Shape Expectations for Next Week's Bank of Canada Rate Decision, RBC Says

07:31 AM EDT, 10/19/2026 (MT Newswires) -- Monday's release of Canada's September consumer price index and the Bank of Canada's third-quarter Business Outlook Survey (BOS) will be key in shaping expectations for the Oct. 28 policy decision, providing further insight into whether higher energy prices are spilling over into broader inflation, according to RBC Economics in a note. Headline CPI is expected to remain unchanged at 3.0% annually for a third consecutive month, as rising gasoline and furnace oil prices offset easing food inflation, RBC wrote in a Friday note. Core inflation, excluding food and energy, is projected to decline to 1.8% on the year, down from 2.1% in August, suggesting limited spillover from higher energy costs. Transportation prices will be monitored closely for evidence of broader inflationary pressures, said the bank. The BoC's BOS will offer additional insight into the impact of higher fuel prices and renewed trade uncertainty on firms' sales, capital spending and hiring intentions, as well as their pricing behavior and inflation outlook, added the bank. Near-term inflation expectations are expected to edge higher, while longer-term expectations should remain broadly anchored around the central bank's 2% target. Soft economic growth, back-to-back monthly employment declines and an unemployment rate of around 6.5% complicate the BoC's policy outlook, said RBC. With inflationary pressures competing against signs of a weakening economy, the bank expects the BoC to leave rates unchanged for the remainder of the year.