Canada's inflation rate climbed back up to two per cent in October, shifting expectations slightly in favour of a smaller, quarter-percentage point interest rate cut next month. The report from Statistics Canada on Tuesday said prices in October increased at a faster annual pace in five out of the eight major components of the consumer price index.

Inflation in October came in at two per cent, back to the Bank of Canada’s target, but accelerating faster than economist predictions of 1.9 per cent year over year and higher than the 1.6 per cent recorded in September.

Inflation in Canada rose by more than forecast and underlying price pressures reaccelerated, hiccups that may dissuade policymakers from a second straight 50 basis-point cut to interest rates next month.