Annual inflation excluding eight volatile items quickened to 2.1 percent in February, the fastest since December 2008, compared with 2 percent in January, Statistics Canada said.
The economy is accelerating out of last year’s recession, with retail sales data today also rising faster than expected, similar to recent reports on growth and manufacturing. The rebound may change how fast Governor Mark Carney raises the central bank’s record low 0.25 percent benchmark interest rate, which he’s promised to keep in place through June unless the inflation outlook changes to support the recovery.
Overall consumer price inflation was also faster than expected, advancing 1.6 percent in February from a year earlier.
Traveler accommodation costs jumped 16 percent in February, Statistics Canada said, while automobile insurance premiums increased 7.9 percent. The year-over-year increase in gasoline prices was 15 percent, slower than January’s 24 percent jump.
On a monthly basis, core consumer prices rose 0.7 percent, the fastest since November 2008, and overall inflation was 0.4 percent.
The central bank’s main goal is keeping the overall annual inflation rate at 2 percent. It focuses on the core measure because that excludes volatile items that can generate short- term swings in inflation.