Inflation rises to 2.4% in March amid conflict in Middle East: StatCan

The annual rate of inflation accelerated to 2.4 per cent in March as the war in Iran sent fuel costs soaring, Statistics Canada said Monday.

That is an increase of 1.8 per cent since February, while economists had expected the March numbers to come in a bit higher than that.

The agency says higher prices for energy and gasoline — due to the conflict in the Middle East — drove the faster price growth in headline inflation.

StatCan said March’s 21.2 per cent monthly increase in the price of gasoline was the largest on record.

It says this was caused by the supply shock resulting from the war in Iran.

The inflationary increase would have been even higher, the agency noted, but the federal government’s move to kill the consumer carbon price a year earlier was still taking some steam out of the annual inflation comparisons in March.

Food inflation, meanwhile, cooled to four per cent from 5.4 per cent in February as the lingering distortions of the federal government’s two-month “tax holiday” a year earlier fell out of the annual comparisons.

That drove down inflation at restaurants and on some grocery items last month.

Fresh vegetable prices jumped 7.8 per cent year-over-year in March, which StatCan attributed to recent tough growing conditions for cucumbers, peppers and celery.

The Bank of Canada will be paying close attention to the March inflation figures as it prepares for its next interest rate decision on April 29.

With files from The Canadian Press.

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