Canada's rate of inflation came in at 1.4 per cent year-over-year in October, following a 1.6 per cent rate in September, easing mainly due to smaller gasoline price increases, Statistics Canada said Friday.

The government agency said shelter and transportation prices contributed the most to October's rise in its consumer price index, while clothing and footwear prices showed a decline when compared with October 2016.

Transportation prices were up by three per cent on a year-over-year basis in October, following a 3.8 per cent increase in September. The more modest increase was because of gasoline prices, which increased 6.5 per cent year-over-year in October after increasing 14.1 per cent the previous month in the aftermath of Hurricane Harvey.

Consumer prices for household operations, furnishings and equipment rose 0.2 per cent in the 12 months to October after the three previous months all showed year-over-year declines.

Clothing and footwear prices were down in October by 1.5 per cent compared to the previous year, with the cost of women's clothing falling 4.6 per cent compared with a year ago.

Of the three inflation measures closely watched by the Bank of Canada for the purpose of setting monetary policy, Statistics Canada said the CPI-common reading for October was 1.6 per cent, up from September's 1.5 per cent. The CPI-median reading eased to 1.7 per cent from 1.8 per cent, while CPI-trim remained steady at 1.5 per cent.

The inflation rate has remained below the Bank of Canada's stated target of two per cent, even as the Canadian economy enjoyed a surge earlier this year. However, some market watchers see that situation changing, with inflation expected to pick up.

"There is good reason to think inflation will soon turn a corner," said TD senior economist James Marple in a commentary.. "Wage growth has accelerated notably in recent months and job growth has been concentrated in full-time positions. Alongside a lower Canadian dollar and more stable energy prices, this should set the stage for inflation to move toward two per cent over the next year."

Karl Schamotta, director of global product and market strategy at Cambridge Global Payments, said stable price increases in October are likely to keep the interest rates frozen in place into the early part of 2018, at odds with what the market might expect given than the U.S. Fed is likely to hike rates.

"In the absence of strong momentum, [Canada-U.S.] interest rate differentials are increasingly unlikely to provide lift to the loonie — suggesting that we may see it head south for the winter. For Canadian exporters at least, warmer days lie ahead," Schamotta said in a commentary.