Another interest rate increase by the Bank of Canada is all but a done deal. Even though inflation, as measured by the Consumer Price Index (CPI), fell slightly to 6.9% in September, it remains well above the Bank’s 2.0% target.

Price relief at the gas pumps gets the credit for the decline but soaring grocery costs stole the headlines. Food prices jumped more than 11% in September.

While supermarket prices dominated the talk, shelter costs – which carry a heavy weight in the CPI – continued to rise and hit 6.8% year-over-year, up from 6.6% in August. Mortgage costs rose 8.3% while the increase in replacement costs slowed to 7.7% and other “owned accommodation expenses” climbed 5.8%.

More importantly core inflation – which strips out volatile consumer items like food and fuel – remains stubbornly high and actually increased to 5.43%, up 13 basis-points from August.

Core inflation is the measure the Bank of Canada uses to set its interest rate policy. So, the question becomes: how big will this week’s increase be?

A short survey of some of the country’s best known economists by BNN shows a majority of them forecasting a 75 basis-point increase. That would put the Bank’s trendsetting, overnight rate at 4.0%. There is a sense among market watchers that the Bank will pause at that level, but some say there could be another 25 to 50 bps hike by the end of the year.

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