Canada: Inflation surges in March driven by higher energy prices
April 19, 2011
In March, consumer prices added 1.1% over the previous month, well above both the 0.3% increase observed in February and market expectations of a 0.6% rise. As a result, annual headline inflation jumped from 2.2% in February to 3.3% in March, the highest rate since September 2008. Most of the upward pressure on inflation came from higher energy prices, which spiked 12.8% on an annual basis (February: +10.6% year-on-year) and to a lesser extent from rising food prices (+3.3% yoy). Annual core inflation, which excludes oil and fresh food prices, rose from a record low of 0.9% in February to 1.7% in March. The Bank of Canada updated its forecasts in April 2011 and now expects headline inflation to average 2.5% in 2011 and 2.1% in 2012.