Higher gasoline prices helped to push Canada’s annual inflation rate up to 2.3% in March, Statistics Canada said today.

That was up two-tenths of a percentage point from February’s rate and matched the expectations of most analysts.

The core rate of inflation, which excludes volatile items like gasoline, mortgage interest costs and fresh fruit and vegetables, rose by 1.9% year-over-year.

Economists had been expecting the core rate to stand pat at February’s 1.8% rate or even slip to 1.7%.

Core inflation is now at its highest rate in more than a year and is just below the Bank of Canada’s 2% target rate.

Gasoline prices in March were 11.2% higher than they were a year earlier, making it the 11th month in a row that gas prices have been the biggest factor driving the cost of living higher.

Upward pressure also came from home renovation and maintenance, restaurant prices, property taxes and fuel oil prices, which were 25.8% higher than they were a year ago.

On a month-over-month basis, consumer prices rose by 0.6% from February to March. Gasoline increased by 5.2%.

Higher prices for women’s clothing and travel tours also put upward pressure on the CPI last month, Statistics Canada said.

Automobile leasing and purchasing actually became 0.6% cheaper in March. “This monthly decrease is attributed to increases in the financial incentives offered in March by some automotive vehicle manufacturers,” the federal agency said.

The rise in inflation increases the odds of an interest rate hike by July.

“This is a bit hotter than the Bank was anticipating,” said Doug Porter, senior economist with BMO Nesbitt Burns.

“Combined with the clear strength in recent domestic demand indicators, this should ramp up talk of second-half Bank of Canada tightening – we will stick to our call of a rate hike in July,” he said in a morning commentary.