Propelled by the rising cost of gasoline, cars, shelter and food, Canada's Consumer Price Index rose to 2.4 per cent last month, the highest it's been in two years.

In a release Tuesday, Statistics Canada said the annual inflation rate jumped half a point in October, from 1.9 per cent the month before.

"About half of the 0.5 percentage point increase can be attributed to higher gasoline prices," Statistics Canada said, noting that prices at the pump were 8.8 per cent higher than a year earlier, following a 3.1 per cent increase in September.

Energy prices have followed a similar trend. Fuelled by an 11 per cent hike in natural gas prices, and electricity price hikes of 8.1 per cent, overall energy prices advanced 9.1 per cent during the 12 months to October, following a 5.6 per cent increase in September.

Year-over-year, consumers were paying more for items in every province across the country, with Ontario's 3.4 per cent inflation rate leading the pack.

British Columbia trailed close behind, posting overall price increases of 2.4 per cent during the 12 months to October.

Prices were up in seven of the eight components tracked for the Consumer Price Index including:

  • increasing property taxes and electricity prices pushed shelter costs up 2.8 per cent
  • higher prices for meat, fresh vegetable and restaurant meals fattened food prices by 2.2 per cent
  • rising gas, automobile and insurance costs drove transportation costs up 4.6 per cent

Even when volatile items such as gasoline are excluded, the underlying core inflation rate -- which is monitored closely by officials setting interest rates -- rose to 1.8 per cent over the 12-month period. That was up 0.3 per cent from the previous month.

Although the hike in the annualized consumer price index was well above what analysts had forecast, the core rate is very close to the Bank of Canada's 2 per cent target.

Last month, the Bank of Canada said inflation would average 2.1 per cent through December, with core prices rising 1.6 per cent in the same period.

After three consecutive interest rate hikes, the central bank kept its core lending rate at 1 per cent. Its next rate announcement is expected on December 7.