The Canadian Consumer Price Index came in a little weaker than expected on the headline, but stronger on the core rate, likely keeping the Bank of Canada on the sidelines, economists say.

Statistics Canada says the CPI fell 0.2% in October. A 6.6% drop in energy prices was a major contributor to the decline.

The headline rate dropped to 1.6% in October, down from 2.2% the prior month, and below expectations for a slide to 1.7%.

However, core CPI came in at 1.8%, slightly above expectations of a 1.7% rate.

BMO Nesbitt Burns says that there were no major surprises in today’s CPI, although the core inflation rate is holding up a little more stubbornly than expected. Still, CIBC World Markets says that a 0.2% monthly gain is hardly threatening, and none of the major price components recorded a material breakout, it says.

CIBC notes that higher property tax and auto insurance was pressuring the core rate. “While Canadians were able to buy a new car for 2.9% less than a year ago, the cost of insuring it continues to race ahead, with vehicle insurance premiums up 18.9% over the past 12 months,” it says.

“It appears that the Bank of Canada may be getting just what it wanted. Core inflation has inched forward for the past two months now, but it still remains below the 2% target. Furthermore, things will likely continue at this pace, at least over the short run, as the deflating impact of an appreciating Canadian dollar is countered by stronger growth,” RBC Financial says. “As such, the Bank of Canada will be more than happy to leave rates right where they are.”