Signage marks the Statistics Canada officies in Ottawa on July 21, 2010. Statistics Canada says the consumer price index in February was up 2.2 per cent compared with a year ago.THE CANADIAN PRESS/Sean Kilpatrick

Annual inflation rate rises to 2.2% for its fastest pace since fall 2014

Statistics Canada says the consumer price index in February was up 2.2 per cent compared with a year ago

The country’s annual pace of inflation sped up to 2.2 per cent last month for its fastest pace in more than three years as the rate moved above the central bank’s ideal bull’s-eye of two per cent, Statistics Canada said Friday.

The agency’s February data represented a significant boost to the inflation rate compared with the month before when it was 1.7 per cent.

The report also found the average of the agency’s three measures of core inflation, designed to omit the noise of more-volatile items like gasoline, continued its upward momentum last month and has now climbed slightly above two per cent for the first time since February 2012.

Related: Annual pace of inflation slows as the price of gasoline levels out: January

Inflation is a central piece of the information for the Bank of Canada’s interest-rate decisions and the stronger numbers translate into a hike sooner than experts have anticipated.

“Inflation is BAAAACK, but it’s not yet a scary monster, being essentially in line with what the Bank of Canada actually wanted to see,” CIBC chief economist Avery Shenfeld wrote in a report Friday.

TD Bank senior economist James Marple said the recent ”dovish tone” from the Bank of Canada on the interest rate will surely be challenged by the robust core inflation numbers.

“All told, today’s data does create the risk that the Bank of Canada moves sooner, but with downside risks to the economic outlook still elevated, this summer remains most likely to see the next policy interest rate hike,” Marple wrote.

Statistics Canada’s inflation report said the main driver that pushed up year-over-year consumer prices in February was the higher cost of gasoline, which rose 12.6 per cent, while pricier items like restaurant meals and passenger vehicle also had impacts.

Related: Annual inflation accelerates to 2.1 per cent: December

The primary downward forces on prices came from cheaper video equipment, digital devices, hotels and electricity.

Year-over-year prices climbed in every province in February compared with the year before, with the strongest acceleration in Atlantic Canada.

The last time the overall inflation reading reached 2.2 per cent was October 2014, just as the oil-price crash was getting underway.

The Bank of Canada aims to keep the headline inflation close to two per cent, the midpoint of its target range of one to three per cent.

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 in order to buy more time to monitor trade-related uncertainties out of the United States.

At the time, the central bank reiterated that more interest rate hikes would likely be necessary over time. However, it said the governing council would proceed cautiously when considering future decisions and would be guided by incoming data, such as the economy’s sensitivity to higher rates, the evolution of economic capacity and changes to wage growth and inflation.

In a separate report Friday, Statistics Canada said retail sales increased 0.3 per cent in January to $49.9 billion, with the biggest increase coming from general merchandise stores. In comparison, retail trade fell 0.8 per cent in December to $49.6 billion.

Andy Blatchford, The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Five-goal outburst leads Vees to victory

The Penticton Vees continued their march to the playoffs with a 5-2 win over the Warriors, Tuesday.

Council voices approval of brewery patio expansion

City council unanimously voted in support of Cannery Brewing’s 199 person capacity patio.

Four things ‘not’ to do if you run into Prince Harry and Meghan in B.C.

Like many in British Columbia, you may be worried about running into… Continue reading

Almost 20,000 parking tickets issued by Interior Health at hospitals in 2019

In 2018, pay parking in Interior Health hospitals totalled $5.3 million of their $2.2-billion budget

NHL prospects returning to Penticton for Young Stars Classic

After a one-year absence the Vancouver Canucks Young Stars Classic is returning… Continue reading

Anti-pipeline protests in support of Wet’suwet’en continue at B.C. government buildings

‘We are unarmed, they have guns,’ protesters chanted on Wednesday morning

Immigration program not taking away North Okanagan jobs

The pilot is helping employers overcome a skilled labour shortage that can’t be filled solely by residents

Vernon-based company nominated for B.C. small business award

Summit Tiny Homes is one of five finalists for the small business award

Harry and Meghan should cover their own security costs: NDP heritage critic

The prince, Meghan Markle and their eight-month-old son Archie are reportedly staying at a mansion near Victoria

EDITORIAL: Examining finances

Municipal budget will likely mean higher taxes

Summerland’s proposed budget requires $16,382,355

2020 budget is nearly half a million higher than the 2019 municipal budget of $15,905,410

UBC Okanagan art students to improve the environment one project at a time

The Ecosine Art Group uses non-purchased, recyclable mediums for 50 per cent of their art

Disability proves no barrier for 12-year-old Kelowna sit skier

Samuel is a 12-year-old double leg amputee who independently sit-skis

West Kelowna man charged with attempted murder of 79-year-old mother back in court

Kevin Lee Barrett was charged in April 2019 after allegedly beating his mother, leaving her stranded

Most Read