OTTAWA — The country’s annual pace of inflation sped up to 2.2 per cent last month to rise above the Bank of Canada’s ideal target of two per cent.
The February data from Statistics Canada represented a significant boost to the inflation rate compared with the month before when it was just 1.7 per cent.
The report also says the average of the agency’s three measures of core inflation, designed to omit the noise of more-volatile items like gasoline, also continued its upward momentum last month and has now climbed slightly above two per cent.
Inflation is a central piece of the information for the Bank of Canada’s interest-rate decisions and, with both readings above target, another hike could come even sooner than experts have anticipated.
The inflation report says the main driver that pushed up consumer prices last month was the higher cost of gasoline, while pricier items like restaurant meals and passenger vehicle also had impacts.
The primary downward forces on prices came from cheaper video equipment, digital devices, hotels and electricity.
The last time the overall inflation reading reached 2.2 per cent was October 2014, just as the oil-price crash was getting underway, while the average of the core measures hasn’t been above two per cent since February 2012.
Bank of Canada governor Stephen Poloz has hiked the benchmark interest rate three times since last summer, but he maintained the rate following a policy meeting earlier this month.
The Canadian Press