Canada’s annual inflation rate rose in February to 1.4% from the 1.1% rate seen in January, Statistics Canada reported Thursday.

Higher prices for food and shelter were the primary reasons for the increase in the consumer price index , StatsCan said.

Bay street economists had predicted the 12-month inflation rate to come in at 1% for February.

On a se monthly basis, consumer prices rose 0.4% from January to February, the first increase in five months.

Food prices increased 7.4% during the 12-month period to February, following a 7.3% increase in January, StatsCan said. The main contributors to the overall jump in food costs were a 25.8% hike in the price of fresh vegetables, a 9.7% rise in the price of bakery and cereal products, and a 6.1% increase in meat prices.

Shelter costs, the second-largest factor, increased 3.0%, which was slightly less than the 3.3% rise in January.

Holding inflation back was a year-over-year decline in the price Canadians were paying at the gasoline pumps. Gasoline prices in February were 19.7% below levels in February last year.

Excluding gasoline, the annual inflation rate rose 2.5% in the 12 months to February.

The Bank of Canada’s core inflation rate — which factors out many volatile influences and is used by the central bank for the purpose of setting monetary policy, such as lending rates — advanced 1.9% over the 12 months to February, identical to the increase posted in January.

IE