Statistics Canada reports that consumer prices increased 5.7 percent for the month of February, up from 5.1 percent in January. The increase was the largest since August 1991, and February marked the second consecutive month in which headline inflation exceeded 5 percent, according to Xinhua news agency.
Excluding gasoline, the Consumer Price Index (CPI) rose by 4.7 percent year over year in February, exceeding the gain of 4.3 percent in January when the index rose at the fastest rate since 1999. Shelter costs continued to rise, rising at the fastest rate since 1983, according to Statistics Canada.
According to Statistics Canada, the CPI increased by 1.0% on a monthly basis in February, the biggest increase since February 2013, following a 0.9% increase in January. Andrew Grantham, a Canadian Imperial Bank of Commerce economist, predicted that the spike in gasoline prices in early March will see headline inflation accelerate again next month to just over 6%.
In the meantime, supply chain issues will take longer to resolve and prevent inflation from decelerating later in the year, he said. He added that while the combination of strong domestic growth and high inflation should make it relatively easy for the Bank of Canada to continue hiking, it will have a more delicate balancing act in the second half of this year with growth likely to slow and inflation likely to stay high for longer.
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