Julie Gordon, Ismail Shakil

(Reuters) – Canada’s inflation rate accelerated to a new 30-year high in February, with wide price increases hitting Canadian consumers at gas stations and in grocery stores, according to official data on Wednesday.

Analysts had predicted a gain of 5.5%, but the increase was 5.7%. This is the most significant change since August 1991, Statistics Canada stated. This was the eleventh consecutive month that the Bank of Canada’s control range of 1% to 3.3% had been exceeded.

Statscan stated in a statement that “price rises were broad-based February,” pinching Canadians pocketbooks.

The February 2021 gas prices went up 32.3%, but grocery prices rose 7.4%. Shelter costs increased 6.6%.

Six of the eight main component baskets saw prices rise, and all three of their core indicators of inflation were also on the rise.

This is not only a story about food and energy. These gains are also sweeping the core,” stated Doug Porter, Chief Economist at BMO Capital markets.

CPI Common Measure, which is claimed by the Bank of Canada to be the most accurate indicator of economy’s performance, rose from 2.3% in Jan to 2.6%.

The central bank increased its policy interest rate earlier in the month for the first-time in over three years. Tiff Macklem, Governor of Tiff Macklem indicated that they are prepared to act quickly if necessary to reduce inflation expectations.

According to economists, red-hot inflation could lead to such an action.

“It makes it more likely that there will be a larger rate increase at the next meeting” said Derek Holt (vice president of capital markets economics at Scotiabank).

“They should hit the policy rates harder, given the fact that they are so far behind on the inflation mandate,” said he.

Following the publication of the data, the Canadian currency gained more and was at 1.2689 USD to the U.S.dollar. This is 78.81 U.S.cents.