Inflation in February was higher than expected.

Rebound in inflation in February, exacerbated by the end of the temporary GST/HST holiday.

Statistique Canada reported this morning that the Consumer Price Index (CPI) rose by 2.6% year over year in February, following a 1.9% increase in January.

Because taxes paid by consumers are included in the CPI, the end of the temporary GST/HST holiday on February 15 clearly put upward pressure on prices. Nevertheless, a broad-based increase in prices was observed across the country last month. This was slightly tempered by slower growth in gasoline prices.

Experts were expecting an increase in inflation in February. However, the magnitude of the rise was greater than anticipated. This could lead to an increase in bond yields, which influence mortgage rates, as investors seek compensation for the future loss of their purchasing power.