Mortgage interest still driving inflation, as overall rate nudges up to 2.9%

Canada's inflation rate went up slightly in March compared to February, with Statistics Canada pointing out gasoline prices are partly behind the increase.

The federal agency's consumer price index for March 2024 saw a 2.9 per cent increase compared to the year before.

In February, that measure was at 2.8 per cent, so while March saw an increase in inflation, the situation would be different if often-volatile gasoline prices are excluded from the calculation.

According to Statistics Canada, without gasoline prices, inflation actually went down slightly in March. Economists such as Pedro Antunes point out that «core» inflation, which strips out some of the more volatile and irregular prices, seems to be weaker than expected.

«That's definitely good news,» said Antunes, chief economist with the Conference Board of Canada, who also pointed out that many inflation numbers are now getting within the Bank of Canada's targets.

Canada's central bank had been increasing interest rates since March 2022, with 10 rate hikes in less than two years.

Earlier this month, Bank of Canada governor Tiff Macklem said that cutting interest rates in June is «within the realm of possibilities,» but that the central bank needed to see a sustained slowdown in inflation before cutting rates.

Shelter costs up, clothing costs down

The inflation rate for services, such as air transportation, was up by 4.5 per cent. But goods — the items consumers and businesses purchase, generally speaking — was up at a far lower rate of 1.1 per cent.

Food prices rose three per cent compared with a year ago, while prices for clothing and footwear fell 2.7 per cent. Prices for household operations, furnishings and equipment dropped 2.3 per cent.

The cost to stay sheltered in