Canada's inflation rate drops almost a full point

OTTAWA (AP) -- Consumer prices in Canada tumbled last month in their steepest one-month drop since 1959, as falling energy prices cut the annual inflation rate by almost a full point in September.

Statistics Canada reported Friday that Canada's inflation rate dropped to 2.6 percent from 3.4 percent in September.

The dive raises fears that Canada could be heading for a period of deflation, in which the economy shrinks and prices drop.

Consumer confidence has been shaken by fears of a global recession, leading to stock markets that plunged sharply in October.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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