By Julie Gordon and Ismail Shakil
(Reuters) -Canada's annual inflation rate accelerated in February to hit a fresh 30-year high, with broad price gains hitting consumers on all fronts, data showed on Wednesday, bolstering the case for the Bank of Canada to move forcefully on rates.
At 5.7%, the gain beat analysts' estimates of a rise of 5.5% and is the highest since August 1991, when the inflation rate hit 6.0%, Statistics Canada said. It was the 11th consecutive month above the Bank of Canada's 1% to 3% control range.
"Price increases were broad-based in February, pinching the pocketbooks of Canadians," Statscan said.
Gasoline prices jumped 32.3% compared with February 2021, while grocery prices were up 7.4%. Shelter costs jumped 6.6%, the biggest increase since 1983. Canadian home prices hit a new all-time high in February, data showed on Tuesday.
Price gains accelerated in six of eight major component baskets, with all three core measures of inflation rising.
"This is certainly not just the food and energy story ... We're seeing these gains sweeping through the core as well," said Doug Porter, chief economist at BMO Capital Markets.
The CPI common measure, which the Bank of Canada says is the best gauge of the economy's performance, rose to 2.6% from 2.3% in January. CPI trim was 4.3% and CPI median was 3.5%.
The Bank of Canada hiked its policy rate for the first time in more than three years earlier this month, and Governor Tiff Macklem said the bank was prepared to act aggressively going forward to keep inflation expectations grounded.
Red-hot inflation could force that action, said economists.
"It adds to the case for having a bit of a bigger rate hike at the next meeting and shutting down the (bond) purchase program, as they've already guided," said Derek Holt, vice president of capital market economics at Scotiabank.
"I think they have to hit the policy rate harder given how far behind they are on the inflation mandate," he added.
Money Markets see a roughly 60% chance of a 50 basis-point move from the Bank of Canada at its April meeting, with a total of seven hikes expected in 2022. [BOCWATCH]
The Canadian dollar extended gains and touched 1.2689 to the U.S. dollar after the data was released, or 78.81 U.S. cents.