Canada Inflation Rate MoM: November 2025 Release and Macro Implications
The latest inflation rate month-over-month (MoM) figure for Canada, released on November 17, 2025, shows a 0.20% increase. This report analyzes the data within a broader macroeconomic context, comparing it to historical trends and assessing implications for monetary policy, fiscal stance, and financial markets. Using the Sigmanomics database, this editorial provides a data-driven, forward-looking perspective on inflation dynamics in Canada.
Table of Contents
Canada’s inflation rate MoM for November 2025 rose by 0.20%, doubling last month’s 0.10% increase and aligning exactly with market expectations. This figure marks a moderate acceleration compared to the subdued inflation prints earlier this year, reflecting ongoing price pressures amid evolving economic conditions.
Drivers this month
- Shelter costs contributed approximately 0.12 percentage points, continuing a steady upward trend.
- Energy prices added 0.05 percentage points, reflecting recent volatility in global oil markets.
- Food prices remained stable, contributing minimally to the monthly change.
Policy pulse
The 0.20% MoM inflation rate remains above the Bank of Canada’s target monthly pace of roughly 0.15%, suggesting persistent inflationary pressures. This supports a cautious stance on monetary policy, with the central bank likely to maintain current interest rates or consider further tightening if inflation proves sticky.
Market lens
Immediate reaction: The Canadian dollar (CAD) strengthened by 0.30% against the USD within the first hour post-release, while 2-year government bond yields rose by 5 basis points, signaling market anticipation of sustained monetary tightening.
The inflation rate MoM of 0.20% in November 2025 compares with a 12-month average of approximately 0.25%, indicating a slight deceleration from the longer-term trend but an uptick from recent months. Historically, inflation has fluctuated significantly, with peaks such as 1.10% in March 2025 and troughs like -0.10% in May and September 2025.
Monetary Policy & Financial Conditions
The Bank of Canada’s policy rate currently stands at 5.25%, reflecting aggressive tightening over the past year to combat inflation. Financial conditions remain tight, with credit spreads elevated and mortgage rates rising, which may dampen consumer spending and housing demand.
Fiscal Policy & Government Budget
Fiscal policy remains moderately expansionary, with the federal government running a deficit of 1.80% of GDP in 2025. Infrastructure spending and social programs continue to support demand, partially offsetting monetary tightening effects.
External Shocks & Geopolitical Risks
Global energy price volatility and geopolitical tensions in Eastern Europe have contributed to inflationary pressures, particularly in energy and commodity sectors. Supply chain disruptions remain a risk, though easing compared to 2024.
Chart insight
The inflation trend shows a pattern of oscillation around the 0.10–0.30% range monthly, with occasional spikes linked to energy and shelter costs. The November uptick may indicate renewed upward pressure but does not yet suggest a return to the high inflation regime seen earlier this year.
This chart reveals a stabilization of inflation after volatile swings in early 2025. The current upward move signals potential for moderate inflation persistence, which will be critical for policy calibration in coming months.
Market lens
Immediate reaction: The Canadian dollar (CAD) appreciated 0.30% against the USD, while 2-year bond yields climbed 5 basis points, reflecting market expectations of continued monetary tightening. Equity markets showed mild volatility but no decisive trend shift.
Looking ahead, inflation in Canada faces a mix of upward and downward pressures. The Bank of Canada’s policy decisions, global commodity prices, and domestic demand will shape the trajectory.
Bullish scenario (20% probability)
- Inflation moderates to below 0.10% MoM by Q1 2026 due to effective monetary tightening and easing supply constraints.
- Consumer price pressures ease, allowing the Bank of Canada to pause rate hikes.
Base scenario (60% probability)
- Inflation remains around 0.15–0.25% MoM through early 2026, reflecting balanced supply-demand dynamics.
- Monetary policy remains steady, with gradual normalization of financial conditions.
Bearish scenario (20% probability)
- Inflation accelerates above 0.30% MoM due to renewed energy price shocks or wage pressures.
- Bank of Canada responds with further rate hikes, risking economic slowdown.
Structural & Long-Run Trends
Long-term inflation trends in Canada reflect demographic shifts, productivity growth, and globalization effects. While short-term volatility persists, structural factors suggest inflation will gradually align with the 2% target over the medium term.
The November 2025 inflation rate MoM of 0.20% signals a moderate but meaningful rise in price pressures in Canada. While not alarming, it confirms that inflation remains above the Bank of Canada’s comfort zone. Policymakers face a delicate balance between curbing inflation and supporting growth amid external uncertainties and fiscal stimulus.
Financial markets have priced in this inflation trajectory, with the Canadian dollar and bond yields reacting accordingly. Investors should monitor upcoming data releases and central bank communications closely for signs of shifting policy stances.
Overall, the inflation outlook remains cautiously balanced, with risks tilted slightly to the upside given geopolitical and commodity market uncertainties.
Key Markets Likely to React to Inflation Rate MoM
Inflation data in Canada typically influences currency, bond, equity, and commodity markets. The following tradable symbols historically track inflation trends closely and are expected to react to the November 2025 print:
- CADUSD – The Canadian dollar’s exchange rate against the US dollar is sensitive to inflation and monetary policy shifts.
- RY – Royal Bank of Canada, a major financial institution, reflects economic and interest rate expectations.
- ENB – Enbridge Inc., an energy infrastructure firm, correlates with energy price-driven inflation changes.
- BTCUSD – Bitcoin’s price often reacts to inflation expectations and monetary policy uncertainty.
- USDCAD – The inverse of CADUSD, also highly sensitive to inflation data.
Inflation vs. CADUSD Since 2020
Since 2020, the Canadian dollar’s exchange rate against the US dollar (CADUSD) has shown a strong inverse correlation with inflation rate MoM readings. Periods of rising inflation often coincide with CAD appreciation due to expectations of tighter monetary policy. The November 2025 print’s 0.20% increase aligns with a recent CAD strengthening trend, reinforcing this relationship.
FAQ
- What does the November 2025 inflation rate MoM indicate for Canada’s economy?
- The 0.20% MoM increase suggests moderate inflationary pressures persist, signaling cautious monetary policy ahead.
- How does this inflation reading compare historically?
- It is above recent months’ lows but below the March 2025 peak of 1.10%, indicating a controlled inflation environment.
- What should investors watch following this inflation release?
- Investors should monitor Bank of Canada communications, commodity prices, and currency movements for policy clues.
Takeaway: Canada’s November 2025 inflation rate MoM of 0.20% confirms persistent inflation above target, supporting a cautious but steady monetary policy outlook amid mixed macroeconomic signals.
The November 2025 inflation rate MoM of 0.20% marks a clear increase from October’s 0.10% and remains slightly below the 12-month average of 0.25%. This suggests a mild rebound after a period of subdued inflation readings in late 2025.
Comparing historical data, the March 2025 peak of 1.10% stands out as an outlier driven by transitory supply shocks, while recent months have seen more moderate fluctuations. The current figure signals persistent but controlled inflationary momentum.