UPDATE 2-Canada March inflation higher than forecast; core tame

Thu Apr 17, 2014 9:01am EDT
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* Total inflation 1.5 pct yr/yr, 0.6 pct mo/mo

* Core inflation 1.3 pct yr/yr, 0.3 pct mo/mo

* Bank of Canada expected higher overall inflation

* C$ rises (Adds market comment, C$ strengthening)

By Randall Palmer

OTTAWA, April 17 (Reuters) - Costlier energy helped boost Canada's annual inflation by more than expected in March to 1.5 percent from 1.1 percent in February but the less volatile core measure that guides the Bank of Canada edged up to only 1.3 percent from 1.2 percent.

Statistics Canada said on Thursday the month-on-month rate was 0.6 percent for overall inflation and 0.3 percent for core. The median forecasts in a Reuters survey were 1.4 percent annually and 0.4 percent monthly for headline inflation and 1.3 percent and 0.3 percent respectively for core.

The Bank of Canada on Wednesday had raised its forecast for overall inflation in the first quarter to 1.3 percent from 0.9 percent, and pulled forward its expected time frame for it to reach the 2 percent target to the first quarter of 2015 from the fourth quarter of 2015. It aims to keep inflation between 1 and 3 percent.   Continued...