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Ottawa, Mar 24 (Canadian-Media): Canada's annual inflation rate had jumped to 2.2. percent in February, from 1.7 percent in January, Statistics Canada reported on Friday.
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Rise in the cost of living by 2.2 percent annually, its highest level since 2014 is due mainly to the sharp increases in the price of energy, gasoline and food at the restaurants, mortgage interest costs by 5.3 percent, 12.6 percent and 4 and 2.3 percent respectively in the past 12 months.
"That's a big swing from recent years, when falling borrowing costs were regularly holding down inflation," Bank of Montreal economist Doug Porter said. "Clearly, the pendulum has swung on that one."
On the other hand there had been decrease in price for electricity by 4.7 per cent, traveller accommodation by 4.8 per cent, digital computing equipment and devices by 5.9 percent, video equipment by 10.1 per cent and furniture by 1.8 per cent in the past 12 months.
Atlantic Canada experienced the highest inflation rate across the country in February.
"Growth was strongest in the Atlantic provinces, led by higher prices for food purchased from stores," the data agency said in a release.
James Marple, Toronto-Dominion Bank economist believed that recent minimum wage hikes was a factor in the increase in restaurant meal prices.
But Maple reportedly thinks the Bank of Canada will be paying close attention to Friday's inflation report.
"After several months below two per cent, inflation pressures have picked up and have moved on top of the Bank of Canada's target," Marple said. "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."
(Reporting by Asha Bajaj)