Canada’s February inflation rate dropped to 2.8%, beating economists’ expectations of a rise to 3.1%. Factors included decreased costs in cellular services, groceries, and internet access. Rent and mortgage interest remained primary inflation drivers, while gas prices rose slightly. New cell phone plan prices dropped by 26.5% from the previous year. The Bank of Canada’s core inflation measure also fell below expectations, suggesting potential interest rate cuts in June.

Despite overall inflation slowing, grocery prices continued to rise, but at a slower pace than headline inflation for the first time in more than two years. While some categories like fresh fruit, processed meat, and fish saw declines, overall grocery prices remained on an upward trend.