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.

Just Posted

Langley’s AOK team need help repairing homes, restoring lives

An Aldergrove family will get help retrofitting their house in May, thanks to volunteers.

Fraser Health patients to see 23% hike in knee, hip replacement surgeries

New approach will see first-available surgeon waitlists

Calgary trampled Stealth at Langley Events Centre Saturday night

Pro Langley lacrosse players are off to Georgia for the last game of the season.

Kindness of Alberta students fulfills dream for older Langley couple

A new roof and fence enable a Langley City couple to stay in their home.

Lawn bowlers kick off Langley season

The bowlers welcomed new members and civic officials.

REPLAY: B.C. this week in video

In case you missed it, here’s a look at replay-worthy highlights from across the province this week

Final week for ALR input

Public consultation process closes April 30

‘When everybody leaves: Counselling key to help Humboldt move on after bus crash

Dealing with life after a tragedy can be the worst part following a loss

One person arrested after man killed in Vancouver

Police say this is Vancouver’s seventh murder of 2018

Half-naked shooter guns down four, runs away in Nashville Waffle House shooting

Nashville police say they are looking for Travis Reinking in connection with the shooting

Downtown roads closed for Vancouver Sun Run

Thousands of runners participate in the annual event

Child’s body found in river downstream from where boy went missing during flood

Three-year-old Kaden Young was swept out of his mother’s arms in February

B.C. VIEWS: Eliminating efficiency for farm workers

Don’t worry, NDP says, the B.C. economy’s booming

Hockey for Humboldt charity game Friday

Event in Maple Ridge will benefit bus tragedy victims

Most Read