March 18, 2016 / 12:49 PM / in 3 years

Canada February annual inflation rate cools on cheaper gasoline

A woman carries shopping bags during the Christmas shopping season in Toronto, December 7, 2012. REUTERS/Mark Blinch

OTTAWA (Reuters) - Canada’s annual inflation rate slowed in February as a drop in gasoline prices pulled inflation away from the mid-point of the Bank of Canada’s target, data from Statistics Canada showed on Friday.

Annual inflation was 1.4 percent, modestly exceeding analysts’ expectations for a pullback to 1.5 percent from January’s 2.0 percent.

Gasoline prices were the biggest driver of the deceleration, resuming their decline with an annual 13.1 percent drop after increasing in January on a year-over-year basis.

But prices still rose in six of the index’s eight major components, led by higher costs for food and shelter. Canadians paid 3.9 percent more for food compared to a year earlier, with higher costs for fresh fruit and vegetables contributing the most to the increase. Shelter costs rose 1.2 percent.

Core inflation, which strips out some volatile items and is watched by the Bank of Canada, was more robust than the main consumer price index, edging down to 1.9 percent from 2.0 percent.

Reporting by Leah Schnurr; Editing by Frances Kerry

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