The annual inflation rate inched up to 0.9% in October from the 0.7% year-over-year rate seen in September, Statistics Canada said today.

Economists had been forecasting the rate of inflation for last month to come in at 1%.

Not since March 2004 have two straight months seen the 12-month change below 1%, Statistics Canada said.

Factoring out volatile energy prices, the annual inflation rate rose by 2% between October 2005 and October 2006, rising for the second consecutive month. Statistics Canada said rising costs of home ownership were largely responsible for the upswing.

A fall in gasoline prices took some of the sting out of last month’s inflation report. Consumers paid 14.3% less for gasoline last month than they did in October 2005. This follows the 12-month drop of 18.7% in gas prices in September.

Year-over-year prices for home heating oil and natural gas were also down.