Canada's annual inflation rate fell to 1.1% in February, down from a 1.5% increase in January, Statistics Canada said Friday. On a month-to-month basis, however, prices rose 0.8% from January.
The measure is well below the Bank of Canada's target of two per cent, meaning an interest rate hike remains far away.
Bank of Canada governor Stephen Poloz said in September the inflation rate will be the key focus of the central bank's policy.
Core inflation, which strips out volatile products such as food and energy, rose just 1.2% from a year ago, a drop from the 1.4% increase in February. Month-over-month, core inflation was up by 0.7%.
Both were pleasant surprises for analysts, who were expecting a 1% annual increase in Canada's inflation rate, and a 0.5% monthly increase in core inflation.
