'Unambiguously good': Inflation slows in February as price growth unexpectedly eases

Canada's inflation figures came in softer than expected for a second consecutive month, suggesting to economists that the Bank of Canada will have ample grounds to begin cut interest rates in the coming months.

Canada's inflation figures came in softer than expected for a second consecutive month, suggesting to economists that the Bank of Canada will have ample grounds to begin cut interest rates in the coming months.

Statistics Canada released its consumer price index report Tuesday, which shows the annual inflation rate fell to 2.8 per cent amid sharp declines in cellular and internet services, as well as slower grocery price growth.

Economists were widely expecting Canada's inflation rate to have risen above January's 2.9 per cent, in part due to higher gasoline prices.

"This is an unambiguously good report from the Bank of Canada's perspective. It essentially shows that high interest rates are working to tame inflation, which is what they're looking for to start cutting interest rates," said Katherine Judge, a director at senior economist and CIBC Capital Markets, in an interview.

The federal agency says prices for wireless services were down 26.5 per cent and internet prices fell 13.2 per cent from a year ago.

Prices for food purchased at stores in February were up 2.4 per cent from a year ago, marking the first time prices grocery prices rose more slowly than overall inflation since October 2021.

However, that's little relief to Canadians who continue to pay significantly higher prices for food than they did a few years ago. The federal agency says grocery prices increased 21.6 per cent between February 2021 and February 2024.