Inflation jumps to 2.6%, complicating the BoC’s April rate cut decision amid tariff uncertainty.
Canada’s headline inflation surged to 2.6% year-over-year in February, a sharp jump from January’s 1.9% and higher than economists had expected.
Weaker price growth in gasoline (+5.1% y/y, down from 8.6% in January) helped temper the overall acceleration in CPI. Shelter costs (+4.2% y/y) and transportation expenses (+3.0% y/y) also saw slower gains, rising just 0.2% and 0.3% month-over-month, respectively.
CPI data puts the BoC in a “difficult place”
This morning’s inflation data puts the Bank of Canada in a tough spot as it weighs the decision to cut rates. “Canadians’ inflation expectations have risen, but the hit to demand from uncertainty and the tariffs…