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B.C. inflation cools in February, but 'the battle isn't won yet'

B.C. inflation rate reached 2.6 in February: StatCan
The cost of mobile phone plans dropped by 26.5 per cent in February, according to Statistics Canada's Consumer Price Index.

Consumers prices on the West Coast continued their ongoing cooling trend for the second month in a row.

B.C.’s inflation rate hit 2.6 per cent in February, down from three per cent in January, according to Statistics Canada data released Tuesday.

That softer growth was enough to pull B.C.’s inflation rate below the national average, which rose by 2.8 per cent in February.

Declining costs of mobile phone plans (-26.5 per cent), internet services (-13.2 per cent) and footwear (-2.7 per cent) were among the major drivers that cooled the national inflation rate last month.

Mortgage interest costs (+26.3 per cent), rent (+8.2 per cent) and electricity (+10.7 per cent) pulled inflation in the other direction.

“February's inflation report was a little bit of good news for Canadians,” TD senior economist Leslie Preston said in a note.

“After stalling through the second half of last year, that is two months of improvement on the Bank of Canada's key core inflation gauges.”

She added that “the battle isn’t won yet” and that the central bank is unlikely to cut its key rate until July.

“April still seems too early to be pulling the trigger on rate cuts, though it can't be entirely ruled out if the [Bank of Canada’s] Business Outlook Survey shows even more progress,” BMO chief economist Douglas Porter said in a note.

“At a minimum for April, look for the Bank to open the door to rate cuts. BMO continues to call for a June start to rate cuts, and this report certainly reinforces our conviction.”

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