Inflation continued to heat up in March, raising market expectations for future Bank of Canada rate hikes.
Headline consumer price inflation topped an annual rate of 6.7% last month, up from 5.7% and above expectations for a 6.1% reading, according to data from Statistics Canada. This is the highest reading since January 1991.
The largest price gains were in energy (27.8% vs. 24.1% in February), gasoline (39.8% vs. 32.3% in February) and food, which hit 7.7%—its highest rate in over a decade.
The average of the Bank’s three preferred measures of underlying core inflation, which exclude volatile goods, rose to 3.8% in March, up from 3.5% previously.