Canadians spent big in August. That just made the Bank of Canada's October call a coin flip.

Canadian retail sales rose 1.2 per cent in August to C$74.57 billion, Statistics Canada said on Friday, reversing July's 0.7 per cent drop and coming in slightly below expectations, Reuters reported.

Sales were higher in all nine subsectors, the agency said, led by motor vehicle and parts dealers — which account for more than a quarter of total sales and gained 1.2 per cent. Core sales, which exclude gasoline stations and vehicle dealers, rose 1.1 per cent, and sales increased 1.2 per cent in volume terms, meaning Canadians actually bought more goods, not just paid higher prices.

The agency also gave a flash estimate for September, pointing to a further 0.7 per cent gain — a sign the momentum carried into the fall.

The timing is what makes the number matter. This is the last major economic data before the Bank of Canada's Oct. 28 monetary policy decision, where money markets are pricing in a 25-basis-point rate hike. Economists, though, are divided on whether the central bank will hike or hold.

Retail sales account for about 40 per cent of consumer spending and are considered an early indicator of GDP growth. A second straight month of gains tells the Bank that households still have fuel in the tank — and that a rate cut now could fan demand while the economy is already absorbing U.S. tariff pressure on steel and autos, and oil prices running near five-month highs.

For Canadians, the stakes are direct. Variable-rate mortgage holders and anyone renewing a fixed term in the next year are watching Oct. 28 more closely than any data release: a hike pushes borrowing costs higher at a moment when many households are still adjusting to past increases, while a hold leaves relief on the table if inflation is really coming down.

The Bank releases its decision on Oct. 28 at 9:45 a.m. ET, alongside its quarterly Monetary Policy Report. Serious Pick will cover it as it happens.