- Derek Holt, Scotiabank's vice-president of economics
Canada's annual inflation rate unexpectedly climbed in March, driven by higher food prices as a drop in gasoline prices moderated, according to Statistics Canada. Annual inflation stood at 1.2% in the reported month, hovering around the lower end of the central bank's target range. Core inflation, which irons out volatile items and is a favourite gauge of the Bank of Canada, also was stronger than expected as it climbed to 2.4% on an annual basis from 2.1% in the previous month. Measured on a monthly basis, total inflation inched higher by 0.7%, while core climbed 0.6%. The Bank of Canada held interest rates steady last week, refraining from adding to January's unexpected rate cut, as it predicts the Canadian economy will bounce back later this year after likely stalling in the first quarter.
A separate report showed Canada's retail sales surged the most in eight months in February, driven by widespread gains and an increase in sales at gasoline stations. Sales jumped 1.7% to $42.2 billion in the reported month, after a downwardly revised decline of 1.4% and 1.8% in January and December, respectively. Core retail trade, which excludes volatile automobile and parts sales, rose 2%, the biggest increase since June, compared with the expected 0.7% growth.
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