TD Bank economists say that inflation remains on the rise, and the Bank of Canada may have to raise rates in response.

In a research note, TD says its analysis shows that the increase in core inflation over the past four months, “reflects a general increase in the price inflation in core services in Canada. Moreover, we show that this increase in the inflation rate for core services is broad-based — despite the deceleration in the inflation rate for shelter.”

Additionally, it finds that the “overheating” Albertan economy has been the main source of inflation in Canada, contributing disproportionately to overall inflation.

“All told, there appears to be a very strong case that would support the view that a further increase in the overnight rate by the Bank of Canada may remain in the cards,” it concludes.