Canada's Inflation Surges to 2.6% Following End of Tax Holiday

The unexpected rise, driven by broad-based price pressures, complicates the Bank of Canada's monetary policy decisions.

February's inflation rate of 2.6% marks the first time in seven months it has exceeded the Bank of Canada's 2% midpoint target.
The end of a temporary GST/HST holiday significantly contributed to the increase, with inflation estimated to have been 3% without the tax break.
Core inflation measures, CPI-median and CPI-trim, rose to 2.9% in February, reflecting widespread price increases across key categories like food, clothing, and shelter.
Monthly inflation saw a sharp rise to 1.1% in February from 0.1% in January, surpassing analyst predictions of 0.6%.
Rising inflation pressures have led markets to anticipate a pause in interest rate cuts by the Bank of Canada in April, as policymakers face challenges balancing economic uncertainties and inflation control.