Canadian inflation rose at fastest pace in eight months

As reported by Bloomberg, February’s inflation growth in Canada was the fastest in eight months. Such an increase further limits the ability of the country's central bank to cut interest rates amid trade tensions, which are contributing to a slower economic growth and higher costs of goods and services.

Last month, the consumer price index in Canada increased by 2.6% year-on-year, which is the highest pace since June 2024, the news agency says. On a monthly basis, inflation rose 1.1% in February.

Katherine Judge, an economist at Canadian Imperial Bank of Commerce, notes that the record price growth does not yet reflect the impact of import duties. The US tariff policy may cause the Canadian consumer price index to rise above 3% year-on-year, the expert emphasizes.

According to the market, the probability of the Canadian central bank reducing its borrowing costs by 25 basis points in April reaches 25%. It is down from the previous estimates of 40%, Bloomberg says. 

Bank of Canada Governor Tiff Macklem said the regulator will take a cautious approach to interest rate decisions due to trade tensions.