Inflation falls below one per cent

OTTAWA — A major drop in the price of gasoline and declines in several other goods and services pushed down Canada’s inflation rate to 0.7 per cent last month.

October’s inflation rate was down four-tenths of a percentage point from September and the lowest level since May. On a monthly basis, overall prices in October were down 0.2 per cent from September. Both declines were twice as large as economists expected.

Analysts said the soft inflation reading supplied ample justification for the Bank of Canada’s decision last month to jettison a tightening bias on monetary policy, which had been in place for 18 months.

Many now don’t expect the Bank of Canada to raise its key shortterm rate from a very low one per cent until mid-2015.