But take away the cheaper gas, and the consumer price index would have been up to 1.9 per cent in February because food was more expensive.
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The bank said earlier this month that it expected the factors that had pushed overall inflation up to 2 percent recently would likely be unwound in the months ahead. The core rate which strips out prices for gasoline and other volatile items fell to 1.9 per cent from 2 per cent.
In a separate report, Statistics Canada reported unexpectedly strong retail sales for January, led by motor vehicle and parts dealers. Economists were expecting a 0.6% rise, according to Royal Bank of Canada. Excluding the auto sector, sales were up 1.2 percent, while overall volumes gained 2.1 percent.
Annual inflation was 1.4 percent, modestly exceeding analysts’ expectations for a pullback to 1.5 percent from January’s 2.0 percent.
Retail sales were up in eight provinces in January, with Alberta showing a decline of 0.2 per cent and Prince Edward Island edging down 0.1 per cent from December. The loonie rose to a session high of 77.38 cents, its strongest level since late October, compared with 77.03 cents late Thursday.
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Meanwhile, the national inflation rate cooled to 1.4 per cent in February, down from two per cent in January.
