Canada's annual inflation rate remained above the central bank's traditional comfort zone in September as consumers were hit by higher gasoline and food prices, according to Statistics Canada data on Friday.
The consumer price index jumped 3.2 percent from a year earlier, up from 3.1 percent in August and a notch above market forecasts.
The core rate also sped up to 2.2 percent from 1.9 percent, also above estimates and the highest rate since December 2008. The core index is considered a better gauge of price trends because it excludes eight volatile items like gasoline and food.
The Bank of Canada targets annual inflation of 2 percent within a control range of 1-3 percent. But Governor Mark Carney has signaled he is willing to keep the benchmark interest rate at an ultra-low 1 percent amid what he considers transitory inflationary pressures because he is more worried about the European debt crisis and the potential for another global recession.
Canadian inflation has eased from a 5-1/2 year-high of 3.7 percent in May and remained tamer in September than the U.S. rate of 3.9 percent or Britain's 5.2 percent, both three-year highs.
Excluding just food and energy, annual inflation was a tamer 1.9 percent.
On a monthly basis, the all-items CPI index edged up 0.2 percent and core CPI rose 0.5 percent.