James Smith, developed markets economist at ING, points out that the Canadian inflation picked up significantly in March, rising from 1.5% to 1.9% in annual terms, driven primarily by the ongoing rebound in energy prices.
Key Quotes
“Gasoline prices rose 12% in February – the most substantial one-month gain since 2007. Throw in the fact that two out of the Bank of Canada’s three core inflation measures rose back up to (or above) 2%, and overall, price pressures appear to be growing a little quicker than we had previously anticipated.”
“Despite the slightly better news on inflation, the deterioration in the economic outlook means a Bank of Canada hike this year isn’t guaranteed.”
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