The Labor Department on Wednesday reported that consumer prices in October rose 2.6% from a year earlier. That marks a pickup in the pace of inflation from September, when prices were up 2.4% on the year.

U.S. inflation ticked higher in October, but stable core price pressures and tame month-on-month gains prompted a sigh of relief on Wall Street and likely supported bets for an end-of-year interest rate cut from the Federal Reserve.

Interest rates are a key tool that the Bank uses to control the level of inflation. After the August drop from 5.25 per cent to 5 per cent, inflation also dropped unexpectedly. In September, the inflation rate (CPI) reached 1.7 per cent, dropping below the Bank’s 2 per cent target for the first time in more than three years.