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Compared to a year ago, the country’s annual inflation rate picked up its pace last month to hit 2.4% in an advance mostly fuelled by higher gasoline prices, Statistics Canada said Friday.

The federal agency’s October inflation number marked an increase from 2.2% in September and pushed the reading a little farther away from the Bank of Canada’s 2% target.

Economists had expected October inflation to be 2.2%, according to a poll by Thomson Reuters Eikon.

Year-over-year prices at the pump were 12% higher in October, air transportation prices were up 9.4%, and mortgage interest costs climbed 7%, the report said.

The downward pressure last month was led by price declines of 7.2% for video equipment, 4% for telephone services and 3.9% for traveller accommodation, compared to a year earlier.

But prices were higher last month in all provinces compared to October 2017, with Alberta the only one to show a slower pace of inflation. A year earlier Alberta’s inflation rate was 3% while last month the pace was 2.8%.

In Ontario, Statistics Canada said energy prices slid 2.4% on a month-to-month basis after the provincial government got rid of its carbon cap and trade program, which had been introduced last January.

The average of the agency’s three core inflation readings, which omit more-volatile items like gas prices, edged slightly higher to 2% last month to hit the Bank of Canada’s bull’s eye. The average core, or underlying, measure was 1.93% in September, 2.03% in August and 1.97% in July.

The central bank pays close attention to core inflation ahead of its interest-rate decisions—and it can raise its trend-setting rate as a way to keep inflation from rising too high. It aims to keep inflation within a range of 1% to 3%, with the 2% mid-point as its primary target.

Bank of Canada governor Stephen Poloz’s next interest-rate announcement is scheduled for Dec. 5.

Despite October’s results, the pace of inflation won’t continue to beat estimates, said CIBC senior economist Andrew Grantham in commentary.

“Given the recent dive in oil prices, inflation should quickly retreat below 2% in the coming months,” he said.

If this occurs, he added, “there’s nothing here to force policymakers into a December hike, particularly given the recent decline in oil prices.”

September retail sales

In a separate report Friday, Statistics Canada said retail sales for September moved up 0.2% compared with August. Month-to-month retail trade was essentially unchanged in August and saw an increase of 0.2% in July.

The September increase brought retail trade to $50.9 billion for the month.

The main contributor behind the increase was higher sales, of 0.9%, at food and beverage stores. Supermarkets saw sales rise 1.7%, which more than made up for a 1.7% decline in beer, wine and liquor stores.

Sales also rose at general merchandise stores by 1.2%, while motor vehicle and parts dealers saw an increase of 0.5%.

“Headline sales slightly increased in dollar terms, but the underlying details were considerably better,” said Derek Holt, vice-president and head of Capital Markets Economics at Scotiabank, in Friday commentary.

Holt highlighted that the volume of sales climbed 0.5% compared to last month, which is “the best monthly gain since May […].” As a result, he added, “Q3 GDP tracking is now at 2% using the monthly GDP estimates. […] The BoC’s October MPR had forecast 1.8% growth in Q3 GDP and that appears to be tracking well into next Friday’s GDP figures.”