Statistics Canada reported on Wednesday the country's consumer price index (CPI) rose 0.4 percent m-o-m in February, following a 0.3 percent m-o-m advance in the previous month.

On the y-o-y basis, Canada's inflation rate increased 2.2 percent last month, decelerating from 2.4 percent in December. That was the highest inflation rate since May 2019.

Economists had predicted inflation would increase 0.4 percent m-o-m and 2.1 percent y-o-y in February.

According to the report, prices increased in seven of eight major components on a y-o-y basis in February, with transportation (+4.4 percent) and shelter (+2.3 percent) prices contributing the most to the all-items gain. At the same time, prices for household operations, furnishings and equipment (-0.2 percent in February) decreased for the fifth consecutive month, largely due to lower prices for telephone services and household durable goods. Elsewhere, prices for gasoline rose less in February (+7.0 percent y-o-y) than in January (+11.2 percent y-o-y), reflecting lower crude oil prices amid lower global demand following the COVID-19 outbreak at the end of January. Excluding gasoline, the CPI rose 2.0 percent, matching gains in the two previous months.

Meanwhile, the closely watched the Bank of Canada's core index rose 1.8 percent y-o-y in February, the same pace as in January. Economists had forecast an advance of 1.7 percent y-o-y.