Statistics Canada reported on Wednesday the country’s consumer price index (CPI) rose 0.6 percent m-o-m in January 2021, following a 0.2 percent m-o-m drop in the previous month.

On the y-o-y basis, Canada’s inflation rate increased 1.0 percent last month after advancing 0.7 percent in December 2020.

Economists had predicted inflation would increase 0.4 percent m-o-m and 0.9 percent y-o-y in January.

According to the report, January’s acceleration in consumer prices was largely due to higher prices for durable goods (+1.7 percent m-o-m) and rising gasoline prices (+6.1 percent m-o-m) compared with December 2020.

Meanwhile, the closely watched the Bank of Canada's core index rose 1.6 percent y-o-y in January, following a 1.5 percent y-o-y advance in December. This was the highest rate since March 2020. Economists had forecast a gain of 1.4 percent y-o-y.