Canada’s annualized inflation rate in March rose to 2.4% as the war in Iran led to a record increase in gasoline prices across the country.
The inflation rate in Canada during February of this year was an annualized 1.8% and most economists expected only a modest uptick in March.
But data from Statistics Canada shows that the annual rate of inflation increased more than half a percentage point during March.
That rise was caused almost entirely by a record 21.2% monthly increase in the price of gasoline during the month.
Fuel prices throughout Canada spiked higher due to the war in Iran, which sent crude oil above $100 U.S. a barrel for most of March.
Statistics Canada said that the inflation rate would have been 2.2% in March if gasoline was removed from the calculation.
Apart from gas prices at the pumps, food inflation in Canada cooled to 4% from 5.4% in February of this year.
Still, vegetable prices rose 7.8% year-over-year in March, which Statistics Canada attributed to difficult growing conditions for cucumbers, peppers and celery.
The Bank of Canada will be paying close attention to the inflation figures ahead of its next decision on interest rates scheduled for April 29 of this year.
