It's a sizeable jump from the 1.9 per cent increase in January
Canada's annual inflation rate rose sharply to 2.6% in February, driven by the end of a federal tax holiday. Statistics Canada noted that without the tax break for half the month, inflation would have been 3%. The increase, particularly in dining out, alcoholic beverages, children’s clothing, and toys, exceeded economists' expectations. While gas prices rose slightly, they helped to moderate the overall increase. Increased travel to the US also contributed. Core inflation is expected to continue rising. The February data doesn't reflect tariffs implemented in March, but the removal of the carbon price in April could ease inflation next month. This complicates the Bank of Canada's interest rate decisions.
