Consumer inflation rose 4.6% in February from a year ago, Statistics Canada reported Friday. Energy prices, and especially gasoline prices, were the main factor behind the rise.

The jump was higher than expected, adding another measure of justification for interest higher rates. The 12-month increase in the index is comparable to that of January, which was 4.5%.

Canada’s consumer price index rose 0.7% in February. Excluding the most volatile items, the central bank’s core CPI measure rose 0.5% in February, allowing the year-to-year rate to moderate to 3.1% from 3.3% in January.

Bank of Montreal says gasoline prices soared 7% in the month and 32.1% from the year-earlier period. Fuel oil costs jumped 11.9% in the month and 47.8% from the year-earlier month. “A recent moderation in crude oil prices, if sustained, should provide some relief to energy consumers in the months ahead, thereby allowing overall CPI inflation to moderate,” said BMO.

“Canadian consumer prices simply refuse to go quietly into the night,” commented BMO Nesbitt Burns. “In the latest month, the upward pressure on core inflation was from a 5.8% rebound in women’s clothing (after heavy discounting in January), and an 11% spike in travel tours.”

But, Nesbitt says, with oil prices now retreating and big increases in costs a year ago set to fall out of the index, headline inflation should drop sharply in the months ahead. “However, core inflation will fall much more slowly, as shown by today’s sticky number. While it is expected to dip back below 3%, it appears that CPIX will remain too close to that key level for the Bank’s comfort.”

TD Bank agres, saying, “There was certainly nothing in this morning’s consumer price data to allow the Bank of Canada to sit back on its laurels. While there do not appear to be any of the big, red, warning flags on the inflation front that would send the Bank of Canada into a frenzy, there was enough to worry about in today’s data to keep the Bank alert and firmly in tightening mode.”

“There is no denying that strong domestic demand in this country is indeed brewing underlying inflationary pressures,” notes RBC Financial. “And with Canada’s economy growing at or very close to full capacity, underlying inflationary pressures will only intensify unless the Bank of Canada continues to keep taking some stimulus out of monetary policy. Therefore, continue to expect additional rate hikes.”